It’s no secret that 2022 was a rough year for the crypto industry: the price of Bitcoin plummeted to its lowest since 2020, crypto exchange FTX crash landed into bankruptcy, and thousands of investors lost millions in cryptocurrency savings. But the biggest story was the dual implosion of Terra’s UST stablecoin and governance token LUNA.
More than a year after the Terra ecosystem came crashing down to earth, the Terra Classic community has voted against the minting and re-minting of Terra Classic USD (USTC) tokens. Voters apparently had a week to vote on whether or not to end the token. According to results – which came out on September 21 – nearly 59% of the community gave its blessing to end all minting activities linked to USTC. About 40% of community members voted in favor of minting and re-minting USTC tokens while less than 7% of the voters abstained.
According to the community, their recent proposal is aimed at protecting the community and outside investors “who are burning USTC” in hopes of re-pegging the stablecoin. It emphasized that any form of mining would undermine any community effort.
Once the third largest stablecoin in terms of market capitalization, the Terra UST stablecoin went into a free fall in May last year after losing its U.S. dollar peg. While UST was designed to stay pegged at $1, its worth reached a paltry 13 cents. Meanwhile, its companion coin, LUNA, which was meant to stabilize UST’s price, was reduced to a fraction of a fraction of a cent.
After the Terra ecosystem fell apart, the Terra Classic community continued as an independent blockchain network, backing the staking of LUNA. Despite the original network’s failure, LUNA still commands a market capitalization of more than $361 million, data from CoinGecko showed.
Notably, crypto exchange Binance—which has been on the backfoot lately amid a lawsuit by the U.S. Securities and Exchange Commission—extended an olive branch to the Terra Classic community in January, saying it would support an upgrade to the network that would eliminate the re-minting of burnt Terra Luna Classic (LUNC) tokens. According to data, about 66% of the network’s voters backed the proposal—and 96% voters voted in favor of the upgrade.
Already in shock from the fallout of the collapse of Terra’s UST and LUNA tokens, the Terra community is facing another threat: phishing scams. In August, Terra temporarily suspended its official website in the wake of phishing scams that targeted its users. In a series of tweets, the network advised users to steer clear of the “terra(dot)money” domain and trust updates only from Terra’s official communication channels like X (formerly Twitter), Discord, and Telegram.
