- The Terra Luna Classic community recently made significant strides by burning 726 million USTC tokens from the Anchor Protocol.
- This development follows the community’s approval of proposal 12135 and a bankruptcy court’s authorization allowing Terraform Labs (TFL) to wind down operations.
- Both LUNC and USTC tokens experienced slight upward momentum following these events.
Learn how the Terra Luna Classic community’s latest decision could impact the future of LUNC and USTC tokens.
Terra Luna Classic Community Burns 726 Million USTC After Proposal Approval
The Terra Luna Classic community has recently approved proposal 12135, leading to the burning of over 726 million USTC tokens within the Anchor Protocol via contract migration. The proposal narrowly passed with 27.23% of the votes in favor, reflecting a strong commitment among community members to reduce the supply of USTC. Validators showed mixed responses, with 25% voting “Yes” and 48% abstaining, but an overwhelming 92% of delegators supported the initiative, signaling widespread community backing for the burn.
Execution Challenges and Future Steps
While the migration to a new contract for the Anchor Protocol was successfully executed, similar efforts on the Mirror Protocol encountered issues that prevented the burning of 46 million USTC. The development team is currently investigating these execution failures and has resubmitted the proposal, promising further action. According to TFL CEO Chris Amani, all Terra Luna Classic assets are slated for burning as per court orders, with a significant deadline approaching on October 31, after which any token burns or transfers will become increasingly complex.
Market Reactions and Token Performance
In response to these significant developments, both LUNC and USTC tokens demonstrated modest price increases. LUNC’s price rose approximately 2% from its 24-hour low, now being traded at $0.0000858. The trading volume for LUNC, however, remains low amid broader market pressures. Similarly, USTC experienced a 2% price rise over the past 24 hours, currently trading at $0.01798. This uptick suggests renewed investor interest, although overall trading volumes declined by 37% in the same period.
The Derivatives Market and Investor Reaction
The recent burning event also triggered increased activity in the derivatives market. Futures open interest for both LUNC and USTC climbed more than 2% in a short span, indicating a positive sentiment among market participants. This spike in derivatives trading underscores investor confidence stemming from the effective reduction in token supply and potential future stability.
Conclusion
The Terra Luna Classic community’s approval and execution of proposal 12135 mark pivotal steps toward token supply reduction and potential market stabilization. While there are challenges to address, particularly regarding the Mirror Protocol, the community’s determination and the upcoming October 31 deadline highlight a critical period ahead. Investors will closely watch the market behavior, governance decisions, and the ongoing impact on LUNC and USTC token prices.
