Terra UST Burn News: Terra Governance Vote To Burn 1.3 Billion UST Receives After Receiving Overwhelming Support From The Voters. The governance vote on Terra’s proposal 1747 to burn 1.388 billion UST has passed. The proposal highlighted that the burn may help restore the UST dollar peg by burning the excess supply.
Do Kwon, the founder of Terra, had stated that absorbing the stable coin supply could be a solution to the Terra fiasco. As a result, users recommended that the 1 billion TerraUSD (UST) saved in Terra’s community pool and the remaining cross-chain UST deployed on the Ethereum blockchain be burned as incentives.
The proposal received an overwhelming 99.39% of the total votes cast. The next step now is for Terraform Labs, Terra’s core development firm, to execute the burn. With the launch upon us, interest in LUNA 2.0 has been steadily growing, with data suggesting that searches with the keyword “LUNA 2.0” have shown a significant increase over the past week.
The fire will be extinguished in two stages. Around 1 billion UST will be delivered from Terra’s community pool to a burn module in the first phase, which will permanently remove the tokens from circulation. After completing this stage, the team will manually transfer 370 million UST from the Ethereum blockchain to Terra and delete them. In a post on the Terra governance forum, this process is described in great detail.
According to the proposal, the burn will help “reduce the Terra economy’s outstanding bad debt.” Apart from that, it’s expected to play a key role in restoring the UST dollar peg by removing a significant amount of excess supply.
UST has been in a tumultuous period since its value plummeted from $1 to $0.04, a 93 percent drop from its initial value. The UST tokens will be burned after the Terra blockchain’s governance system approved Do Kwon’s proposal to relaunch the Terra blockchain and create a new iteration of LUNA tokens known as LUNA 2.0.
The launch will take place on Friday, May 27th, 2022, with the new LUNA tokens being distributed to previous Terra asset holders via airdrop. UST tokens, on the other hand, will be restricted to the original Terra blockchain and will not be available on the new blockchain.
A month-long buyback and burn for LUNA has been committed by crypto exchange MEXC Global, in addition to community burning efforts to support the project. The exchange platform promised to buy LUNA and send it to the burning wallet address with the trading fees earned from the new LUNA/USDT spot trading pair.
According to the proposal, burning UST tokens would help relieve peg pressure on the algorithmic stable coin that had crashed. According to the proposal, the high reward on on-chain swap spread (or arbitrage between UST and LUNA) is the primary cause of the Terra ecosystem’s economic burden.
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