Hope flickers for Terra Luna Classic (LUNC) holders as developers initiate a testnet rehearsal for a proposed 800 million USTC burn, aiming to slash the stablecoin’s supply and potentially trigger a price rally.
This news follows the community’s decision to prioritize burning over fund recovery or blacklisting due to impracticality. Developer Fragwuerdig announced the testnet rehearsal on February 13th, seeking community approval via proposal 45.
Burning Mechanism Explained:
While the testnet currently holds only 10 million USTC (due to supply limitations), the actual burn would target 800 million tokens residing in a multisig contract or Risk Harbor wallet. This code migration, facilitated by a contract migration proposal, requires community approval for the 800 million USTC to be blacklisted and burned. Notably, Fragwuerdig assures that this methodology won’t impact the blockchain’s state.
Also Read: Terra Classic Community Considers KYC Integration: LUNC Price on the Brink of Revival?
Market Reaction:
Both LUNC and USTC experienced initial gains upon the news, with LUNC currently trading at $0.0001145 (after paring some gains) and USTC up 3% to $0.02635. Trading volume surged for both tokens, indicating heightened investor interest.
The potential impact of the burn on LUNC price remains uncertain. While supply reduction often leads to price increases, other factors like overall market sentiment and adoption play crucial roles. The success of the testnet rehearsal and community approval of the proposal are crucial first steps.
Looking Ahead:
The 800 million USTC burn represents a significant development for the Terra Luna Classic community. If successful, it could revitalize investor confidence and potentially trigger a price rally for LUNC. However, cautious optimism is advised, as market forces will ultimately determine the token’s fate.
About The Author
