The historic depeg incident of TerraClassicUSD (USTC), formerly called TerraUSD (UST) in May marked the beginning of the fall of the LUNC token. Since then, LUNC community members and several Terra Classic development teams have been brainstorming ways to achieve a USTC repeg.
Accordingly, the LUNC Layer-1 Joint Task Force has proposed a stunning way to attempt repegging USTC. Per the proposal submitted on Monday by the team lead LuncBurnArmy, the L1JTF seeks community approval to use the already provisioned compute budget to develop the test environment for USTC repeg ideas.
Part of the proposal read: “This proposal seeks the authorization and use of already provisioned compute budget for the purposes of establishing a test environment specifically geared toward testing USTC repeg ideas. As a result, this proposal is a text proposal, and no additional community spend is required currently. It should be noted that only compute budget would be allocated for this item.”
1. #LUNCCommunity please see the following proposal which would authorize the L1 Task Force to build a USTC test environment. Note: We are focused solely on parity right now, and this will not take any time away from that effort con't. https://t.co/CEtEXF3LQe
— 🔥LuncBurnArmy🔥 (@luncburnarmy) May 23, 2023
By creating a test environment, the Terra Classic (LUNC) Layer-1 Joint Task Force hopes to decipher the actual circumstances behind the fall of the supposed algorithm stablecoin, how it could have been stopped, and how to trigger a future repeg. In other words, the development team aims at recreating a simulation of the USTC depeg event, creating a simulated repeg event, and testing strategies for maintaining the USTC peg.
Particularly, the aim of creating a simulated depeg event is to identify possible capital controls that could have prevented the “death spiral” following the USTC depeg (e.g., capping maximum supply). Also, the team plans to conduct a series of transactions to confirm the behavior of LUNC and USTC mint/burn behavior.
As per the proposal, the LIJTF plans to build upon the many USTC repeg proposals that passed governance voting including Redline Drifter’s suggestion to use a tax divergence strategy and buyback mechanism to attempt repegging USTC.
However, the pseudonymous project lead stressed that the team is currently focused on attaining parity for Terra Classic and the Cosmos blockchains. Accordingly, he added that work on the USTC test environment will only begin once the v.2.1.0 upgrade is completed, probably on June 14. Notably, Terra Classic v.2.0.1 upgrade was executed on May 17. Consequently, the LUNC tax burn increase from 0.2% to 0.5% went live with top exchanges announcing support and implementation.
3. We continue to test the v2.1.0 upgrade to parity, and are looking forward to the upgrade on June 14th!
— 🔥LuncBurnArmy🔥 (@luncburnarmy) May 23, 2023
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