The post Terra Luna Classic Community Faces Critical Decisions: Burning Proposals on the Horizon appeared first on Coinpedia Fintech News

The Terra Luna Classic community, VegasMorph, a prominent validator, has boldly proposed to stir up intense discussions. The suggestion involves burning a substantial 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 incinerate a whopping 800 million USTC from the Risk Harbor Multisig Wallet.

VegasMorph’s new proposal centers around burning approximately 8 million USTC, a substantial portion of the 7.95 million USTC currently residing in the community pool. This recommendation, leveraging a spending request directed at a burn address, has been shared across various platforms. StakeBin data confirms the current holdings in the pool.

Given the community pool’s sizable reserve of 3.3 billion LUNC, sufficient for funding on-chain activities and other expenses, the rationale behind this proposal is to utilize funds deemed surplus to community needs.

VegasMorph highlighted the importance of this action, stating, “By initiating this burn of USTC, we’re not only aligning with our deflationary goals but also showcasing our commitment to self-reliance and judicious management of community assets.”

Origins of the Proposal: Seeking Legal Safeguards

This proposal arises amid another contentious suggestion to burn 800 million USTC. After an initial proposal (number 11913) aimed at updating the Terrad client for this purpose was rejected, a new approach, currently under governance voting, seeks a legally secure method for the burn.

Terra Luna Classic validator Lunanauts raised concerns about the legal implications of the initial proposal, prompting the exploration of alternative strategies. The latest proposal (number 11927) proposes using a smart contract to incinerate the 800 million USTC left in the Risk Harbor multi-sig wallet.

This action became imperative following the revelation that Risk Harbor had lost the wallet’s keys and decided to blacklist it. To execute this burn, a core developer must create a contract that transfers all holdings to a burn address with a single MsgSend. This contract is then shifted to that code ID through governance, eliminating the need for validators to install any code and thus reducing potential legal issues.

During the initial voting phase, the proposal garnered an overwhelming 96% support, with a minority voting against or abstaining. The voting is set to conclude on December 27, but key validators are yet to cast their votes.

Market Impact: Fluctuating Prices Amidst Decisions

The market has responded as the Terra Luna Classic community deliberates these critical decisions. LUNC’s price has dipped by 3% in the past day, trading at $0.000155. Concurrently, USTC’s price 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.

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Filed under: Bitcoin - @ December 22, 2023 6:19 am