Terra Classic USD re-peg: Zaradar proposal in full as USTC price-pumps
16:03, 10 October 2022
The much-anticipated terraclassicusd (USTC) re-peg proposal by the developer Tobias Andersen has been released.
It outlines multiple different routes for the failed stablecoin to regain its $1 peg, which USTC has struggled to come anywhere close to since the May crash.
While some community members abandoned the project for the newly launched LUNA2 others have remained and attempted to fix the original network.
LUNA2 to USD
After the plan was released, USTC has been surging. At the time of writing, it was trading at $0.41, up 37% in the past 24 hours and 28% over the previous week.
Easing vs tightening
Andersen, also known as Zaradar, outlined in his Medium post two different paths that the Terra Classic community could take. The first was quantitative easing, a method usually used by central banks, where they purchase government bonds to kickstart economic activity.
The developer did not fully outline how this would apply to Terra Classic. But he said it “would at best result in a slight bump in inflation and could worst case lead to a mass exodus of the remaining liquidity as ‘smart money’.”
The other path, Andersen/Zaradar said, was is a more “painful journey” that adapts quantitative tightening, a technique used by central banks to decrease liquidity in the economy.
If this route were taken, Terra Classic would install burn taxes and increase interest rates on staking rewards. This would be completed by lowereing rewards, and increasing lock-up peroids.
Attracting capital and repegging USTC
The Zaradar proposal has also outlined a plan to attract investments, which could result in the repegging of USTC.
Incentivising new businesses was seen as essential for growing the network and improving stability of the cryptocurrency.
These features would include partitioned pools, where new commodity tokens are created and based on each pool. This also brings another utility to USTC as a “value transfer”, with investors using the stablecoin to swap between pools.
Partial swaps are another newly proposed feature, which enable transactions between the USTC stablecoin and the terra classic (LUNC) cryptocurrency.
Next steps
The Zaradar proposal came a week after another plan to repeg USTC was proposed by three members of the Terra Classic community, Alex Forshaw, Edward Kim and Maximilian Bryan.
New re-peg plan for #USTC and #LUNC sounds bullish ! LFG pic.twitter.com/IslMBMqLFY
— LUNC Community ???? (@lunaclassic_co) October 3, 2022
As both plans are new, there are no specific timings outlined. It is now being left to the community to debate these proposals.
Markets in this article
Related topics
