In an effort to bolster the stability of TerraClassicUSD (USTC) and force it to settle at its mean dollar peg, the Terra Classic (LUNC) community is currently considering proposal 11487 – Signal – USTC Incremental Repeg, Buybacks, Staking, Swaps, submitted by Redline Drifter. This mechanism, if adopted, boasts two primary measures to maintain a peg, namely Divergence Fees and a Buyback mechanism.

Divergence Fees, as imposed by the proposal, serve to stabilize the value of USTC by charging levies on trades that depart from its value target. The amount of these fees would accordingly differ depending on the market price's deviation from the peg. All USTC trading pairs and marketplaces, excluding typical blockchain functions, would be subject to this taxation. These accumulated monies would be recycled back into the repurchase of USTC and maintain its pegged position.

Sellers are then to be confronted with a fee equal to the gap between the pegged and the current rate, should the price of USTC remain below its peg. On the other hand, if the opposite is true, the seller of the cryptocurrency would, consequently, pay a fee corresponding to the difference between the target price and the market trade-in.

On top of these levies, the Divergence Protocol would have the power to automatically buy back USTC as an additional safety precaution to preserve the peg. The community would own the recuperated USTC and use it for a variety of initiatives and progressions on the ecosystem, such as locking tokens out of the circulating supply.

Finally, the stipulated USTC which belongs to the community shall get distributed and divided in a particular fashion. 47.5% is to go to a USTC staking vault and aid in reducing circulating supplies; 47.5% of income revenue is to be allocated to a LUNC to USTC liquidity pool once USTC surpasses its peg; lastly, 5% of the asset will be even divided to an Oracle and Community Pool.

At the time of making, the proposal has been supported by the majority of voters, with only 21% of them opposing it. A few significant validators, nonetheless, have not yet voted. To instill solid growth and recovery of the project, the community had previously started a petition to get listed on Coinbase and also implemented a 1.2% tax burn on transactions done on the network.

The development of this proposal comes a year after the original Terra ecosystem's collapse, leading to the establishment of Terra Classic and a surge in the platform's circulating supplies to 6.9 trillion tokens. Its stability is of paramount importance to the community, as indicated by Redeline Drifter’s newly-acclaimed voteable document. As such, the project awaits future developments and continued support of the growing ranks at Terra Classic.



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