Terra Classic Community Plans Revival of TerraUSD (USTC) After Collapse
The community members of Terra Classic are making plans to revive TerraUSD (USTC) after almost a year since Terra’s shocking collapse. Terra Classic is a fork version that was created after Terra’s collapse in May 2022.
In discussions that began in mid-April, Terra Classic community members have planned to revive USTC by buying back tokens, staking, and implementing an algorithmic fee to address the initial problems that arose with the algorithmic stablecoin, USTC.
According to RedlineDrifter, a community member who proposed the plan, a variable fee mechanism will calculate a fee equal to the price difference between the fixed price and the market price of USTC, which can range from 0% at the fixed level to 100% with a 50% deviation from the market price. The fee will be paid by users when they purchase USTC.
The fees that the protocol retains will be used to buy back USTC and maintain the peg, and the protocol will be implemented on all USTC trading pairs both on and off-chain.
RedlineDrifter wrote in the proposal, “We are in a unique situation with USTC in that it is currently viewed less as a store of value and more a speculative asset.”
“To bring some utility to USTC and take it out of circulating supply in the process, I propose that we create a new savings/staking module for USTC with 1month, 6month and 12month lockup periods with increasing reward rates for longer lockup. 47.5% of the USTC acquired by the Divergence protocol will be sent to the savings module.”
In the proposal, community members also recalled CZ’s comments that Do Kwon had the right idea after the USDC’s peg loss, which made CZ believe that traditional banks are a risk to stablecoins backed by fiat currency, and the crypto market needs a completely decentralized token to create a decentralized economy.
Earlier in late March, Do Kwon, co-founder of Terra, was arrested in Montenegro and faced eight charges including commodity fraud, securities fraud, and conspiracy to commit fraud as well as market manipulation. Daniel Shin, another co-founder of Terra, was also indicted by a South Korean court earlier this week.
At the time of writing, USTC is trading at $0.0214, up over 10% in the last 24 hours according to data from Coingecko.
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