In an unexpected move, VegasMorph, a leading validator within the Terra Luna Classic community, has proposed a significant change. The idea? To burn a large amount of TerraClassicUSD (USTC) currently held in the community pool.
This bold action aims to bring about deflation within the Terra Luna Classic ecosystem, building upon VegasMorph’s previous suggestion to burn 800 million USTC from the Risk Harbor Multisig Wallet.
Understanding the Proposed Burn
VegasMorph’s proposal suggests burning around 8 million USTC, a notable part of the 7.95 million USTC currently in the community pool. This move, supported by a spending request for a specific burn address, has been shared across various platforms and is confirmed by StakeBin data.
Given the community pool’s substantial reserve of 3.3 billion LUNC — more than enough for on-chain activities and other needs — the idea is to use funds considered surplus to the community’s current requirements.
VegasMorph spoke out to highlight the importance of this action.
“By initiating this burn of USTC, we’re not only aligning with our deflationary goals but also showcasing our commitment to self-reliance and judicious management of community assets.”
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Addressing Legal Concerns
This proposal comes amid debates over another significant proposal: the burning of 800 million USTC. After an initial proposal (number 11913) was rejected, a new approach is under consideration to find a legally secure method for the burn.
The Terra Luna Classic validator group, Lunanauts, raised legal concerns about the initial proposal. As a result, the latest proposal (number 11927) suggests using a smart contract to burn the 800 million USTC in the Risk Harbor multi-sig wallet.
Well, what next?
The urgency grew after it was revealed that Risk Harbor had lost access to the wallet’s keys and decided to blacklist it. To carry out this burn, a core developer would create a contract to transfer all assets to a burn address. This contract would then be approved through governance, avoiding the need for validators to install any new code and reducing potential legal issues.
During the initial voting phase, the proposal received strong support with 96% in favor, though some voted against or abstained. The voting will conclude on December 27, and key validators are yet to vote.
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Market Impact: Should You Expect Disruption?
As the Terra Luna Classic community considers these proposals, market indicators have shown changes. LUNC’s price has decreased by 3% in the last day, trading at $0.000155. Similarly, USTC’s price is down to $0.0334, a decrease of 6% from the previous day and 15% from the previous week. Despite these changes, trading volume has increased by 141% in the last 24 hours, reflecting the community’s active involvement in these proposals and the broader Terra Luna Classic ecosystem.
