The Terra Classic (LUNC) community has been cautioned to approach USTC and LUNC trading positions with caution due to the blacklisting of an 800 million USTC wallet.
The warning was issued by a community member named Rexyz, who expressed concerns that the circulating supply data displayed on CoinMarketCap may not provide an accurate representation of the algorithmic stablecoin’s liquidity.
Terra Classic Community Debates Blacklisting 800 Million USTC Wallet
The Terra Classic community is contemplating strategies to revitalize both LUNC and USTC, including periodic asset burning. Recently, the community approved a proposal to blacklist a wallet containing 800 million USTC tokens after months of deliberation about burning these tokens.
While this move is contentious, proponents argue that blacklisting is the best way to encourage the wallet’s owners to contribute to the efforts to stabilize the token’s value. The proposal’s passage led to the implementation of changes in the code, including updating USTC data on CoinMarketCap, initiated on October 20.
However, a community member named Rexyz has raised concerns, stating that the blacklisting may not have been executed in the code and lacks legal documentation to prove its legitimacy. These claims, although unsubstantiated at the moment, underscore the need for caution amid potential volatility.
Despite the debate, USTC experienced a 7.30% price increase overnight, reaching $0.0123. The trading volume surged by 251% to $18.1 million, with a market capitalization of $110.38 million, fueled by the discussions surrounding the wallet blacklist.
USTC Faces Uphill Battle to Regain $1 Peg
USTC, formerly known as UST, was a pioneering algorithmic stablecoin that briefly held its $1 peg before losing it last year, causing LUNA’s value to decline. The community, determined to change this situation, has garnered support from industry giants like Binance.
Efforts to restore USTC’s peg involve more than just burning tokens. The protocol’s core team recently approved Proposal 8813, allocating 1.6 million USTC for the Terra Classic grant program. Despite these consistent efforts, USTC is still down by 98% from its all-time high of $1.05.
Important:Â Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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