The price of the Terra ecosystem’s algorithmic stablecoin that collapsed in May of this year, TerraClassicUSD ($USTC), has surged by over 90% over the past few days after a blockchain engineer submitted a proposal for it to be re-pegged to the U.S. dollar.
The original Terra ecosystem collapsed earlier this year and later rebranded to Terra Classic, while a new, forked blockchain took the Terra brand with it. When Terra’s ecosystem collapsed, its circulating supply jumped from 340 million tokens to 6.9 trillion, and to combat the inflation $LUNC supporters have added a 1.2% tax burn on all transactions conducted on the network.
Terra Classic’s price surged earlier this month after leading exchange Binance announced it will implement the burn mechanism to burn all trading fees on $LUNC spot and margin trading pairs. As reported, Binance CEO Changpeng Zhao noted the exchange burned around 5.6 billion LUNC tokens, at the time worth over $1.8 million.
Now Tobias Andersen, a blockchain engineer and senior developer at Bitcoin Suisse AG, submitted a proposal that outlines a solution to the problem of the uncollateralized TerraClassicUSD token, which at the time of writing is trading at $0.0481 per token, even after surging over 90% over the last few days. In the last 24 hours, it’s up 48%.
Andersen’s proposal is meant to “help heal the community and fix that which was abandoned by its creators.” In a Medium post, the developer wants to get rid of a “massive debt mountain” that was created during the collapse in the form of uncollateralized stablecoins and an “exodus of significant intellectual property.”
The developer’s proposal would recapitalize USTC via quantitative easing and quantitative tightening, with the use of “partitioned pools” and other solutions. To the developer, bringing $USTC back to the $1 mark will support the long-term prospects of Terra Classic.
The cryptocurrency community is bullish on Terra Classic in the long run, as price estimates provided on CoinMarketCap have revealed that the $LUNC community expects to see the cryptocurrency’s price surge over 500% by the end of the year.
Notably, a popular cryptocurrency whale known as Gigantic Rebirth on the microblogging platform Twitter has revealed a massive bet of around $8 million against Terra Classic.
The announcement referenced a second time GCR has done this, as the trader is well-known in the cryptocurrency community for shorting Terra before the collapse, at the time making a bet with Do Kwon himself that the price of its $LUNA token would drop below the $92 line within a year. At stake were $10 million.
Image Credit
Featured Image via Unsplash
