Steep Gas Fee Hike Opposed

The proposal to increase gas fees by 10x was introduced as a potential measure to revive the Terra Classic ecosystem. However, the Terra Classic community voiced strong opposition through various channels, including an X post by the LUNC community channel voicing its concerns and pushing against the proposal.

Read Also: Machine Learning Model Predicts Terra Classic (LUNC) Price for March 31, 2024

Community members expressed anxieties that the fee hike would:

Stifle Ecosystem Growth: Increased gas fees could discourage new users and developers from joining the Terra Classic network, hindering its overall growth potential.

Limit dApp Adoption: Decentralized applications (dApps) built on Terra Classic could become less attractive due to higher transaction costs, potentially leading to a decline in usage. Stellar (XLM) recently launched smart contracts on its mainnet and the fee hike will hurt LUNC as the competition for smart contract adoption and dApp development grows.

Burden End-Users: Users would face a significant rise in the cost of interacting with the Terra Classic blockchain, making everyday transactions more expensive.

These concerns resonated with a significant portion of the community, reflected in the final vote results:

YES: 44.83%, NO: 6.32%, NO (VETO): 35.31%, and ABSTAIN: 13.54%

The proposal ultimately failed to garner enough support, with a combined 41.63% voting against the increase or vetoing it entirely.

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Read Also: Google Bard Predicts Terra Classic (LUNC) Price Should Bitcoin Hit $200,000 After Halving

The Negative Impact on LUNC Price

Initial positive reactions to the proposal led to a temporary surge in LUNC’s price. However, with the proposal’s rejection, the price of LUNC has experienced a reversal. At press time, the digital asset is trading at $0.0001043, reflecting a 36.57% decline over the past month. LUNC has also dropped 6.29% in the past 24 hours, and its trading volume has dipped by 37.06%.

While the gas fee increase proposal did not pass, the Terra Classic community remains active. They have approved other key proposals, and many community members believed this controversial proposal posed too many disadvantages to the ecosystem. The community can now focus on beneficial proposals in their restoration efforts.

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Validator Support and Motivation

This proposed change comes in response to a decline in the number of active validators over the past five months. The financial burden of operating nodes has caused some, like PFC, TMOM, and Lux Blockchain, to exit the network.

Read Also: Terra Classic Proposal To Burn 800 Million USTC For LUNC Revival Rejected. Here’s why

Furthermore, several validators have ceased operations without notifying delegators, resulting in approximately 22 billion LUNC tokens being staked with now-jailed validators. The proposal aims to reverse this trend by ensuring validators receive adequate compensation for their critical role in network security.

Benefits of the Proposal

Beyond bolstering network stability, reimplementing a minimum commission offers several additional benefits. Delegators (those who stake LUNC) would likely see gains, and the network would become more resistant to potential Sybil attacks, where an attacker attempts to dominate the network via multiple nodes.

At the time of writing, support for the proposal is strong, with 81% of votes cast in favor of the proposal. Key validators, including Interstellar Lounge, StakeBin, and LUNC Development Fund, are aligned with the “Yes” vote.

LUNC Background and Ecosystem

Terra Classic (LUNC) is the remnant of the original Terra blockchain, which experienced a dramatic collapse in May 2022. Despite the setback, the community has rallied to rebuild and revitalize the project.

A core aspect of its revival strategy includes upgrades to enhance network functionality and attract developers. Notably, the recent v1.0.5 upgrade has been well-received by the LUNC community, and as we reported earlier, a major upgrade to version 2.4.0 is underway.

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Read Also: Terra Classic Sees Massive Surge in Transaction Volume, As LUNC Price Signals Revival

Market Response: LUNC and USTC

Recent price volatility in LUNC and its sister token, USTC, suggests some profit-taking behavior. According to CoinMarketCap, after a brief rally, LUNC is currently trading at $0.0001955, with a 24-hour increase of 1.66%.

USTC continues to hover near $0.03621, experiencing price fluctuations throughout the week. Market consolidation is expected to continue in the short term, pending the outcome of upcoming upgrades planned for March, and the broader cryptocurrency market sentiment.

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Proposal Details and Community Vote

Proposal 12073 garnered significant community participation, exceeding the necessary “pass threshold.” This vote authorized the burning of 800 million USTC, valued at approximately $32 million, from the Risk Harbor multisig wallet (formerly known as the Ozone Protocol multisig wallet).

Read Also: We Asked ChatGPT How Long It Would Take USTC To Reach $1

Here’s the voting breakdown:

Yes: 40.90%, No: 7.32%, No with veto: 7.82%, Abstain: 43.96%

Among the 58 participating validators, 42 voted in favor, while 11 abstained, and 5 voted against or with a veto. Notably, top validator Allnodes abstained, allowing the community to proceed with the burn. The proposal received overwhelming support when it was launched, and now the community can destroy the tokens.

Burning Mechanism and Potential Impact

The approved proposal lets the community use code to migrate the 800 million USTC from the Risk Harbor multisig contract to a new code version through a contract migration proposal.

This process leverages a migration handler, which automatically handles any applicable taxes associated with the burn transaction. As emphasized by Fragwuerdig, a former developer for the Joint L1 Task Force (L1TF), this methodology will not alter the overall state of the Terra Classic blockchain.

Burning a significant amount of USTC could potentially influence its price by reducing supply, potentially leading to increased scarcity. Token burning is the primary strategy to increase LUNC’s price. However, it is crucial to acknowledge that the long-term impact on the price remains uncertain and is subject to various market forces.

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Read Also: Terra Classic Burn Hits Milestone. LUNC and USTC Set To Explode Again?

Market Reaction and LUNC and USTC Price Movement

Following the proposal’s approval, the price of USTC experienced a temporary surge of 25%, reaching a high of $0.040. Although it has dropped 4.53% over the past 24 hours, USTC is still up 19.48% from the past week. The stablecoin is currently trading at $0.03535.

LUNC is trading at $0.0001297, showing a 6.88% increase over the past week and a 1.14% increase over the past 24 hours. This upward movement potentially reflects renewed investor confidence, and with more proposals on the way, we could see more surges soon.

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This proposal outlines the migration of the Risk Harbor Multisig wallet (containing 800 million USTC) to a new code version, effectively blacklisting the wallet and burning its USTC balance.

Read Also: Terra Classic (LUNC) Gets Closer to Parity as Team Completes v2.1.0 Test Rehearsal Upgrade

Proposal Details and Community Vote

Proposal 12073 garnered significant support from the Terra Classic community. With 51.61% of votes cast in favor. The breakdown of votes is as follows:

Yes: 52.41%, No: 25.82%, No with Veto: 21.57%, Abstain: 0.19%

This overwhelming support signifies the community’s desire to address the high circulating supply of USTC, which has been a key concern since the Terra ecosystem collapsed in May 2022. Reducing the total supply of USTC and LUNC is also a key part of the project’s deflationary model, where the price appreciates with scarcity.

Burning Mechanism and Testnet Rehearsal

The proposed migration involves upgrading the Risk Harbor wallet to a new code version (ID 8508). This new code includes a “migration handler” that automatically blacklists the wallet and burns its entire 800 million USTC balance.

The burning process will also account for the transaction tax, ensuring the removal of the 800 million USTC from circulation. The community has been attempting to burn these tokens for a while, and this could finally be the end of the journey.

A testnet environment was set up to allow developers to simulate the migration and burning process without impacting the mainnet. The successful completion of this testnet rehearsal has paved the way for the actual migration on the Terra Classic mainnet.

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Read Also: Cloud Computing Platform iagon Officially Announces Migration to Cardano from Ethereum Network

Impact and Future Developments

The burning of 800 million USTC is expected to positively impact the price of USTC. However, it is important to note that this is just one step in a broader effort to revive the Terra Classic ecosystem. The community continues to work on various initiatives, including developer engagement, attracting new projects, and fostering community growth.

The approval of Proposal 12073 marks a crucial moment for the Terra Classic community. Participating in governance and supporting initiatives like the 800 million USTC burn demonstrates the community’s commitment to rebuilding and shaping the future of LUNC. This proposal also comes after a recent proposal that some believe could cause a USTC rally to $1.

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The post Terra Classic (LUNC) Recovery Proposal To Burn 800 Million USTC Gains Huge Support appeared first on Times Tabloid.

Proposal #12033, championed by SolidVote LUNC Validator, was met with debate but ultimately passed, showing the community’s commitment to responsible governance.

Read Also: Terra Classic Core Developer States Procedure for the Proposed Grants Program for LUNC Revival 

Fostering Trust Within the Terra Classic (LUNC) Ecosystem

The Terra Classic community has been on a roll recently, as LUNC crossed significant milestones and has now passed a pivotal proposal. The rationale behind this proposal stems from a proactive approach to mitigate potential risks associated with anonymous development activities.

By requiring developers to undergo a compulsory KYC process, the community aims to safeguard against malicious actors who may exploit the system for personal gain, such as engaging in fraudulent activities or manipulating token prices.

The proposal garnered significant attention and sparked vigorous debate within the Terra Luna Classic community, indicative of the diverse perspectives and vested interests at play. Proponents of the measure pointed to its instrumental role in bolstering the ecosystem’s security by discouraging ill-intentioned developers.

However, concerns were raised regarding the potential impact of discouraging talented developers who wish to stay anonymous and the ecosystem straying from the principles of decentralization.

Someone took things further, offering $1,000 to any seven developers willing to change their “yes” vote to a “no with veto” vote. Despite the contention in the community, the proposal secured the necessary support and has been passed.

7 X $1000 payment paid out so far to $LUNC Validators voting NO WITH VETO. This offer is available to any Validators currently voting yes to the proposal. The only requirement for this payment is KYC to verify you are not trying to claim multiple payouts as one individual person.

— 𝐂𝐨𝐚𝐜𝐡 𝐁𝐫𝐮𝐜𝐞 𝐖𝐫𝐚𝐧𝐠𝐥𝐞𝐫 (@OX_DAO) February 7, 2024

Transparency and Accountability

With its successful adoption, the Terra Classic ecosystem is poised to reap the rewards of enhanced transparency and accountability. KYC procedures are important in combating illicit activities and fostering trust in the ecosystem. This decisive step reaffirms the community’s commitment to best practices and responsible governance, and supporters of the proposal shared the news on X.

Read Also: 1.6 Million USTC Going to Terra Classic Grants Program As Proposal Passes with Massive Support

Attention Sends LUNC Surging

The attention from the community has positively impacted LUNC, as the digital asset is trading at $0.0001094, up 15.62% over the last seven days. The attention from the proposal and the recent massive token burns by Binance have pushed LUNC past the crucial $0.0001 level.

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The adoption of proposal #12033 represents a decisive step forward for the Terra Classic community. Despite the detractors, the community has embraced important security measures to preserve the integrity and longevity of the ecosystem.

SolidVote also promised a follow-up proposal that will add Certik, a prominent blockchain audit company, as a KYC provider. The price surge has also triggered discussions of LUNC reaching $0.001.

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