The Terra Classic (LUNC) community has taken a significant step towards reducing the circulating supply of USTC by voting to approve Proposal 12073.
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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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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