In the tumultuous world of cryptocurrency, August 2023 witnessed the Terra Classic community decisively passing a proposal to torch a colossal sum of 800 million USTC tokens. This strategy was adopted with an aim to resuscitate the token’s value and secure its re-anchoring to the US dollar. The community’s intention was clear; however, an unforeseen complication arose, throwing a wrench into the works.
Upon the passage of this proposal, the task fell to the community’s validators to initiate the burn, yet apprehension spread through their ranks. Focused at the heart of this concern was the change to the core code that these validators would be required to implement—a procedure fraught with potential legal entanglements.
Compounding the predicament, Risk Harbor, tasked with managing the treasury, proclaimed that access to the multi-signature wallet containing the significant volume of USTC tokens was out of reach, the keys to it having been misplaced. The necessity for a code modification thus became even more pronounced, further embroiling validators in legal uncertainty, prompting a wave of dissenting votes against the burn.
In the midst of this deadlock, a ray of hope emerged from the Terra Classic validator Lunanauts, presenting what they considered a loophole to bypass the legal mire. Their proposed alternative hinged on utilizing a smart contract for the burn, thus absolving validators from the quandary of altering node codes. According to this plan, the protocol entailed a singular transfer of the total holdings to a designated address through a smart contract. Following this move, governance mechanisms would reallocate the contract’s stewardship accordingly, negating the need for any direct intervention in the validators’ node codes.
This emergent proposal vying for approval diverged sharply from another concurrent proposal—a plan advocating for a complete blacklisting of the problematic multi-signature wallet, thereby preventing any movement of the 800 million USTC tokens it held.
The community now stands at a crossroads, with both proposals jockeying for dominance. The collective voice of token holders through their votes will determine the fate of the substantial cache of USTC tokens, and in turn, the future trajectory of the Terra Classic token.
Despite these undertakings, the overhanging goal remains unchanged: to restore USTC’s former valuation pegged to the US dollar. Yet, with the token still lingering at a striking 96% below its target amid a hefty total supply of 9.78 billion, the pathways to redemption seem as volatile as the cryptocurrency market itself.
