A new Terra Classic re-peg proposal is underway in the quest to advance towards the recovery of the imploded blockchain. However, unlike other proposals which have been passed, a lot of Terra Classic community members are kicking against this new proposal.
In a tweet on the 3rd of September, a member of Terra Rebels, the group behind the rebuilding of the Terra Classic blockchain, shared an updated re-peg proposal channeled towards the restructuring of the depegged TerraClassicUSD (USTC) through the creation of an algorithmic fungible token (AFT).
The Terra Classic Re-Peg: Updated Proposalhttps://t.co/WuP67sBvih
A HUGE thank you to @edk208 , Max Bryan, and of course the #TerraClassicCommunity . 🙏🙏
— 4lex_4sh4w_TR (@4lex_4sh4w_TR) October 3, 2022
Read Also: Over 200,000 Tweets Demand Terra Classic Listing on Coinbase As LUNC Burn Intensifies
The proposal authored by Forshaw, Edward Kim, and Maximilian Bryan says that the Terra Classic Rebels will design and launch a new algorithmic fungible token codenamed USTN.
The proposal’s Abstract read as follows:
“We propose to restructure Terra Classic’s USTC via creation of an Algorithmic Fungible Token, USTN collateralized by a Decentralized Reserve initially of BTC (60%) and LUNC market capitalization (variable), safeguarded by a Capital Control System with major improvements relative to Terra’s legacy CCS.”
The new token, which is similar to a stablecoin, will be majorly backed by Bitcoin (BTC). After launch, the new token will be airdropped to USTC holders.
What is worth noting about the proposal is that the Terra Classic development group plans to mint 500 billion LUNC to buy Bitcoin. According to Terra Rebels, the approval of the proposal will speed up the LUNC burn rate. The proposal says about $5 billion in the adoption of USTN will burn relatively 2.5 trillion LUNC and this could happen within a year.
Expectedly, many Terra Classic community members don’t buy into the idea of minting more LUNC tokens in order to bring about its revival, as this will add to the already voluminous circulating supply. This could also tank the LUNC price further.
Terra Classic Community Reacts
Explaining why this proposal is suicidal for the future of the recovering ecosystem, LUNC Burn wrote in a series of tweets:
“This plan from @4lex_4sh4w_TR to get us $Lunc investors to fund the creation of a new stable coin (even tho he’s not actually calling it a stable coin) is the most craziest out of touch with the community I’ve heard so far. Why on earth should we the $Lunc investors pay for this experiment that will dump the price, and reverse all progress we’ve made this far.
“It will also require the cex and dex to actually list this new coin so it can be traded, that won’t be straight forward by any means, who will also pay for this. It will only work if we swap $Lunc for $ustn, it will require billions and trillions of $Lunc to be swapped if this doesn’t happen hardly none will be burned, also we will know exactly when the price will dump so what’s going to happen around this time, everybody will sell as not to be left holding a bag that depreciates rapidly, hopefully the price will rise again.
“@ZaradarTR is also working on a plan to re-peg $ustc that requires no new $Lunc being minted and will re-peg slower but with less damage. Comment below to show your opinion.”
According to another Terra Classic community member who has a contrary opinion, although it’s risky, the proposal would end up aiding LUNC to reach $1 faster.
Read Also: Here’s why FatMan Thinks Terra Classic cannot hit $0.01 Despite LUNC Burn Plans
In response, LUNC Burn said it’s also the fastest route down to $0 and fastest to over 7.4 trillion LUNC in circulation.
LUNC Burn added that “When the price drops and 500b coins is not enough, then what happens, mint more? Or call it a fail and we start again with over 7.4t coins. It’s a huge risk we don’t need and can’t afford to take LUNC.”
A popular community validator, LUNC DAO, has also kicked against the proposal in a recent tweet, tagging it a bad idea.
LUNC DAO tweeted, “Plans to mint more LUNC tokens are intuitively a bad idea because reducing the supply by burning has been the primary narrative behind the entire revival.”
Plans to mint more $LUNC tokens are intuitively a bad idea because reducing the supply by burning has been the primary narrative behind the entire revival
— 🔥🙏 𝕃𝕌ℕℂ 𝔻𝔸𝕆 🙏🔥 (@LUNCDAO) October 3, 2022
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