- Terraform Labs has received a directive to burn all tokens in their possession.
- Membrane Protocol proposes to use USTC as collateral for its CDT stablecoin.
- The proposal was unanimously approved on July 23, signifying robust community support.
Explore the transformative developments in the Terra ecosystem and the potential impacts on Terra Classic (LUNC) price.
Mass Token Burn Ordered for Terraform Labs
Terraform Labs (TFL) has been mandated to burn all the tokens in its wallets, a strategic move expected to impact the Terra Classic (LUNC) price positively. This action aims to decrease the circulating supply of LUNC and USTC tokens, potentially driving up their value as scarcity increases.
New Utility for USTC within Membrane Protocol
Membrane Protocol recently put forward a proposal to use TerraUSD Classic (USTC) as collateral for its Collateral Debt Token (CDT) stablecoin. This proposal, passed unanimously on July 23, introduces a significant new utility for USTC, integrating it into the Cosmos blockchain ecosystem and potentially enhancing its value.
Market Reaction and Price Movements
Despite the positive developments, Terra Classic (LUNC) saw a price drop of 2.5% in the last 24 hours, bringing it down to $0.00008642. Technical analysis suggests that LUNC is forming a bullish pennant pattern after breaking out of a descending channel. If this pattern resolves to the upside, the price could surge to $0.00012.
Technical Indicators and Market Sentiment
LUNC is currently trading below its 200-day EMA but above its 50-day EMA. The 200-day EMA provides resistance at $0.000098, while the 50-day EMA offers immediate support at $0.0000833. Additionally, a potent support level at $0.00007000 could bolster the price. The Relative Strength Index (RSI) is at 54, indicating a neutral but slightly bullish market sentiment, while the Chaikin Money Flow (CMF) index at 0.13 shows a positive inflow of capital, reinforcing the bullish outlook.
Implications of Terraform Labs’ Bankruptcy Proceedings
Amid these developments, Terraform Labs is undergoing bankruptcy proceedings, with court dates set for July 31 and August 7. As part of the agreement with regulatory bodies, TFL will terminate operations and burn all tokens in their wallets. This mass token burn is anticipated to reduce supply substantially and may contribute to upward price pressures on both LUNC and USTC.
Broader Impacts on the Terra Ecosystem
The introduction of USTC as collateral within Membrane Protocol exemplifies growing recognition of the Terra ecosystem’s value across various blockchain projects. This addition not only diversifies the utility of USTC but also positions it as a vital component within the broader DeFi landscape.
Conclusion
The Terra Classic ecosystem is witnessing renewed activity, characterized by significant developments such as the mass token burn and new utilities for USTC. These factors collectively suggest potential bullish movements for LUNC and USTC in the near future. Investors should closely monitor these developments, as the reduced token supply and enhanced utility could catalyze notable price appreciation.
