Critical Decisions Loom for Terra Luna Classic Community as Burning Proposals Approach
The VegasMorph community, a prominent validator of Terra Luna Classic, has put forward a bold proposal that has sparked intense discussions. The proposal suggests burning a significant amount of TerraClassicUSD (USTC) currently held in the community pool. This move is seen as a strategic effort to induce deflation within the Terra Luna Classic ecosystem, following VegasMorph’s previous proposal to burn a massive 800 million USTC from the Risk Harbor Multisig Wallet.
VegasMorph’s new proposal focuses on burning approximately 8 million USTC, which is a substantial portion of the 7.95 million USTC currently in the community pool. This recommendation, which involves sending the funds to a burn address, has been shared across various platforms. StakeBin data confirms the current holdings in the pool.
The rationale behind this proposal is to utilize funds that are considered surplus to community needs. The community pool already has a sizable reserve of 3.3 billion LUNC, which is more than enough to fund on-chain activities and other expenses.
VegasMorph emphasized the importance of this action, stating, “By initiating this burn of USTC, we’re not only aligning with our deflationary goals but also demonstrating our commitment to self-reliance and responsible management of community assets.”
The proposal originates from the need to find a legally secure method for burning 800 million USTC. An initial proposal to update the Terrad client for this purpose was rejected due to concerns about legal implications. A new approach, currently under governance voting, proposes using a smart contract to burn the USTC held in the Risk Harbor multi-sig wallet.
This action became necessary after it was discovered that Risk Harbor had lost the keys to the wallet and decided to blacklist it. To execute the burn, a core developer must create a contract that transfers all the holdings to a burn address using a single MsgSend. This contract is then shifted to that code ID through governance, eliminating the need for validators to install any code and reducing potential legal issues.
During the initial voting phase, the proposal received overwhelming support, with 96% in favor and a minority voting against or abstaining. The voting is scheduled to conclude on December 27, but key validators have yet to cast their votes.
As the Terra Luna Classic community deliberates these crucial decisions, the market has responded with fluctuating prices. The price of LUNC has dipped by 3% in the past day, trading at $0.000155. Meanwhile, the price of USTC has fallen to $0.0334, a 6% decrease from the previous day and 15% lower than last week. Despite these fluctuations, trading volume has surged by 141% in the last 24 hours, reflecting the community’s active engagement with these proposals and the broader Terra Luna Classic ecosystem.