The Terra Classic (LUNC)
The Terra Classic (LUNC) community has made a significant decision to halt the minting and reminting of the Terra Classic USD (USTC), formerly known as UST. This move follows a period of turmoil that resulted in a sharp decline in the value of the Terra ecosystem, which was previously valued at $45 billion.
In response to the UST de-pegging crisis, the Terra Classic community faced a challenging choice. To protect the interests of the community and external investors, a proposal was introduced to discontinue the UST-LUNA swapping mechanism. This mechanism allowed users to freely exchange UST and LUNA, but it proved to be problematic during times of crisis.
With a 59% approval rate, the Terra Classic community voted in favor of ending the swapping mechanism. This decision reflects the community’s commitment to rebuilding trust and stability within the ecosystem. By ceasing the minting and reminting of USTC, the community aims to prevent future crises and safeguard the value of its assets.
The UST de-pegging crisis, which occurred in May 2022, led to a chain reaction that severely impacted the Terra community. Efforts to stabilize UST’s value through excessive minting of LUNA tokens resulted in an oversupply and a significant loss of value for UST. The recent measures taken, including the halt of minting, are aimed at restoring value to the Terra ecosystem.