LUNC, the embattled native crypto token of the Terra Classic blockchain could be getting ready to rally as this strategic USTC re-peg proposal passes governance voting.
Recall that a prominent LUNC community member known as Redline Drifter submitted an equitable proposal early this month in a bid to get TerraClassicUSD (USTC) re-pegged to the dollar. The concerned community member stressed the need to support the signal proposal, stating that next month will make it one year since the supposed stablecoin de-pegged and negatively affected the price of LUNC.
As per the proposal, Drifter stated two uncommon approaches that could be adopted by the Terra Classic community to make USTC a stablecoin once again. And they included an algorithm peg divergence fee protocol and a LUNC buyback mechanism.
By divergence fees, Drifter suggests that sellers who try to buy USTC below $1 would be levied a fee depending on the difference in the buy price from $1. The proposal also states that 45% of those procure divergence fees would be used to buy LUNC and then burn them, helping to reduce the hyperinflated supply of LUNC.
Deeming these approaches to be promising and feasible, the Terra Classic community has passed Drifter’s proposal after 49.24% of voters voted “Yes” on the signal proposal, at the time of writing. While 6.68% of the total votes voted ‘”No”, others including top validators such as Allnodes and LUNC DAO abstained from voting.
These top validators and other LUNC community members rejected the proposal, citing that centralized exchanges such as Binance may not support the ideas presented by Drifter. Notably, the USTC re-peg proposal would require CEXs to implement divergence fees on USTC sell orders below or above $1.
While these CEXs are yet to respond to the proposal, the LUNC community is hopeful that Binance, the largest LUNC burn contributor would support the re-peg proposal. Because re-pegging USTC to a dollar, coupled with the massive LUNC burns and other solid Terra Classic ecosystem developments could put LUNC in the $1 direction.
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