- Terra Luna Classic community votes to stop minting USTC tokens to fix its value after Terra’s 2022 crash.
- Due to oversupply issues, the community aims to speed up the burning of LUNA tokens to boost their worth.
In a significant development within the Terra Luna Classic (LUNC) community, a decisive vote with nearly 60% in favor has resulted in a decision to halt the minting and reminting of Terra Classic UST (USTC) tokens. This move is seen as a collective response to the challenges faced by USTC, stemming from the collapse of Terra in May 2022, which had a ripple effect across the cryptocurrency market, particularly impacting the value of USTC.
The core objective behind the decision to cease USTC minting and reminting is to initiate a process that can potentially stabilize the beleaguered stablecoin. Part of this strategy involves encouraging members of the Terra Classic community to actively engage in the burning of USTC tokens, a measure aimed at reducing the circulating supply of the token.
Aftermath of Terra’s May 2022 Collapse
Preceding the events of May 2022, Terra’s blockchain network allowed users to seamlessly exchange USTC and LUNA, Terra’s native cryptocurrency. However, the network’s troubles, coupled with the loss of USTC’s peg to the US dollar, led to a scenario where the system began minting LUNA coins in a desperate attempt to restore stability.
This emergency measure resulted in an oversupply of LUNA tokens, subsequently impacting their price and causing USTC’s value to fall significantly below its intended $1 valuation.
Community’s Focus on the Burning Initiative
The Terra Luna Classic community has now placed its emphasis on expediting the burning of LUNA tokens. This process involves permanently removing tokens from circulation, aiming to drive up their value. However, the progress in this endeavor has been gradual, with only 75 billion LUNC tokens successfully burned out of a total supply of 6.84 trillion. This leaves approximately 5.9 trillion LUNC tokens in circulation.
Additionally, the oversupply of LUNA tokens continued due to their minting to restore the USTC peg. It exerted continuous downward pressure on LUNA’s price, significantly dropping USTC’s value from its initial $1 valuation.
Positive Signs Amid Uncertain Times
Despite the challenges, there are encouraging signs within the Terra Luna Classic community. The current trading price of LUNC stands at $0.00006096, reflecting a 0.58% decrease in the past 24 hours and a promising 6.6% surge over the previous week.
Key momentum indicators, observed within a 24-hour window, suggest the possibility of approaching overbought levels. LUNC’s Relative Strength Index (RSI) currently stands at 53, indicating moderate strength, while its Money Flow Index (MFI) registers at 76, suggesting robust accumulation.
Charting a Course for Redemption
The Terra Luna Classic community’s decision to halt USTC minting and reminting showcases a collective determination to rejuvenate the struggling stablecoin. Moreover, with a renewed focus on burning LUNA tokens and addressing the supply-demand dynamics, the community endeavors to realign USTC with its $1 peg.
The path towards stabilizing USTC centers around the strategic burning of LUNA tokens to restore the token’s value. Despite the turbulent journey, positive signals and momentum indicators hint at the potential success of the community’s efforts, offering a glimmer of hope for the future of USTC and the Terra Luna Classic ecosystem.
