Is Terra Classic planning to peg USTC to the dollar again?

Is Terra Classic planning to peg USTC to the dollar again?

The Terra Luna Classic Community’s Bold Move to Revive the Ailing Stablecoin

The Terra Luna Classic (LUNC) community has made a resounding decision to cease the minting and reminting of Terra Classic UST (USTC) tokens. This drastic move, with nearly 60% in favor, aims to rescue the beleaguered Terra Classic stablecoin from its current state of distress. The collapse of Terra in May 2022 sent shockwaves through the crypto market, leaving USTC’s value in shambles.

To facilitate the re-pegging process of the stablecoin, the community has proposed a comprehensive plan that includes the burning of USTC tokens. By actively encouraging members to participate in the burning process, the circulating supply of USTC tokens will be reduced, thereby accelerating the re-pegging process.

Before the catastrophic events of May 2022, Terra’s blockchain network allowed seamless swapping between USTC and LUNA, Terra’s native cryptocurrency. However, as the network crumbled and USTC lost its peg to the US dollar, the system resorted to minting LUNA coins in a desperate attempt to restore stability.

This emergency measure led to an oversupply of LUNA tokens, causing a cascading effect on its price and dragging USTC’s value far below the intended $1 mark. The value of LUNA tokens has been severely diminished due to oversupply, making it essential for the community to burn excess tokens in order to drive up their value.

The burning process entails permanently removing tokens from circulation. Unfortunately, the burning process has been sluggish so far, with only 75 billion LUNC tokens successfully incinerated. This leaves the circulating supply at approximately 5.9 trillion LUNC tokens out of a total supply of 6.84 trillion. By removing excess LUNA tokens, the community aims to alleviate the downward pressure on LUNA’s price and ultimately restore USTC’s value.

Despite the tumultuous journey the Terra Luna Classic community has undergone, there are positive signals that offer a glimmer of hope. According to CoinGecko, the current price of LUNC stands at $0.00006150, reflecting a 2.9% increase in the past 24 hours and a promising 6.6% surge over the past seven days.

Key momentum indicators observed within a 24-hour window also provide optimism. LUNC’s Relative Strength Index (RSI) stands at 53, indicating moderate strength, while its Money Flow Index (MFI) is at 76, suggesting robust accumulation. These positive indicators hint at the community’s efforts to restore value gaining traction.

The Terra Luna Classic community’s decision to halt USTC minting and reminting showcases their commitment to revitalize the stablecoin. By focusing on burning LUNA tokens and correcting the supply-demand imbalance, the community aims to steer USTC back towards its $1 peg. This bold move provides a glimmer of hope amidst a challenging journey of redemption.

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