Terra’s revival continues as core developers got the approval to burn 1.3 billion UST from its community pool following a crucial governance vote. The 1.3 billion UST set to be burnt amounts to around 11% of the total UST supply of 11.2 billion UST.
Proposal Receives Overwhelming Support
The Terra governance system voted overwhelmingly in favor of a proposal to burn all the TerraUSD (UST) tokens that are held by the project in its community pool and all UST deployed for past liquidity incentives on Ethereum. The proposal received an overwhelming 99.3 % of the total votes cast. The next step now is for Terraform Labs, Terra’s core development firm, to execute the burn.
A Two-Pronged Approach
The burn will take place over two phases. In the first phase, around 1 billion UST will be sent from Terra’s community pool to a burn module that permanently removes the tokens from circulation. Once this step is completed, the team will manually bridge 370 million UST from the Ethereum blockchain back to Terra and destroy those as well. This process is explained in great detail in a post on the Terra governance forum.
Terra Blockchain Close To Launch
UST has had an extremely turbulent phase after its value plummeted from its dollar peg of $1 to $0.04, representing a drop of 93% drop from its initial value. The approval for the burning of the UST tokens comes after the governance system approved in favor of Do Kwon’s proposal to relaunch the Terra blockchain and create a new iteration of LUNA tokens called LUNA 2.0.
The launch is set to go ahead on Friday (today), with the new LUNA tokens being airdropped to previous Terra assets holders. However, the new blockchain will not feature UST tokens, with the UST tokens being restricted to the original Terra blockchain.
Interest In LUNA 2.0 Surges
With the launch upon us, interest in LUNA 2.0 has been steadily growing, with data suggesting that searches with the keyword “LUNA 2.0” have shown a significant increase over the past week. However, while the launch of the new Terra blockchain is a significant development, Do Kwon is in a bit of a pickle as he faces a lawsuit filed by disgruntled investors. He is also subject to an inquiry by prosecutors for his endorsement of the Anchor Protocol, which they alleged is akin to a Ponzi scheme.