Terra Luna Classic Agrees to Burn Over 46 Million USTC
The Terra Luna Classic ecosystem has agreed to burn over 46 million TerraClassicUSD (USTC) tokens. These funds belong to Mirror Protocol and are part of Terraform Labs’ winding down requirements. The successful approval of this burn proposal has fueled optimism within the community.
Details of the USTC Burn Proposal
Blockchain researcher Collin Brown disclosed that the USTC burn proposal aims to remove 46.55 million USTC tokens from circulation through contract migration. “This move is set to secure community assets and remove inactive contracts,” Collin stated.
The proposal was introduced for a second time after the first attempt failed during on-chain execution due to an insufficient USTC contract balance. To ensure proper execution, inactive contracts were removed from this latest proposal. Community members showed their support, with the following vote breakdown:
- 33.9% in favor of the proposal
- 1.3% against it
- 36.46% veto
- 28.25% abstained
Burn Focuses on Mirror Protocol Wallets
The USTC token burn focuses on wallets linked to the Mirror Protocol. These funds have been inactive since the May 2022 crash of USTC and LUNA. Terraform Labs is required to destroy all wallets holding Terra Classic tokens as part of its wind-down proceedings. The funds associated with Mirror Protocol are native assets of USTC and LUNC.
During a community wind-down meeting, Terraform Labs CEO Chris Amani mentioned that the tokens will be burned rather than destroyed along with the keys to the related wallets. This approach aims to ensure security and compliance with ongoing legal requirements. “When we look at the Mirror Protocol wallets, they are contract-based, which means they can be migrated to a new code via governance in the same manner as the Risk Harbour funds,” Chris added.
Previous Burn and Legal Background
The latest approval of the burn proposal follows an earlier 726 million USTC burn from Anchor Protocol, as reported by CNF. As a reminder, the US SEC accused Terraform Labs and its founder, Do Kwon, of defrauding investors, leading to the ecosystem’s collapse. Kwon was ordered to pay $110 million as part of a settlement agreement and $14.3 million in prejudgment interest.
As part of the settlement, Terraform Labs received approval to liquidate all assets and cease operations. The court-approved liquidation will allow the company to compensate investors affected by the crash. Thus, the approval of the USTC token burn proposal indicates a positive development toward shutting down the Terraform ecosystem.
USTC and LUNC Surge on Burn Proposal Approval
Following the token burn approval announcement, USTC’s price experienced a 2.2% increase over the past 24 hours, rekindling optimism about USTC reaching its December $0.06 level. However, the price stabilized at around $0.018 as of this writing. Additionally, USTC’s trading volume spiked by 25% in the past day to $8.6 million.
Beyond the USTC rally, the LUNC token gained a 2.3% uptick in the last 24 hours, with the price exchanging hands at $0.00009095. LUNC’s trading volume surged 25.8% in the last 24 hours to $27.7 million.
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