The Terra governance system has voted in favour of a proposal to burn all TerraUSD (UST) tokens in the project’s community pool and UST tokens for previous liquidity incentives on Ethereum.
This amounts to over 1.3 billion UST or nearly 11% of the total supply of 11,2 billion UST. The plan was approved, with 99.3% of the total votes cast in its favour. Terraform Labs, Terra’s key development firm, will execute the burn after the vote.
The burn procedures include two steps. First, about 1 billion UST will be transferred from Terra’s communal pool to a burn module, which will be eliminated from the supply forever. The team will then manually transfer 370 million UST from the Ethereum blockchain to Terra and delete them, as outlined in an explanation post on the Terra governance forum.
Terra governance system approves a plan to burn 1,3B UST tokens. Image: cryptoslate
The dollar-pegged algorithmic stablecoin UST fell from $1 to $0.04 earlier this month before rising somewhat to $0.07, where it is now traded. This reflects a 93% plummet from its value before the dollar’s devaluation.
The UST burn was accepted the day after Terra’s governance system approved Terraform’s revival plan to relaunch the Terra network with LUNA 2.0 tokens.
As previously reported by CoinCulture, the relaunched chain goes online on Friday, followed by an airdrop of the new LUNA 2.0 tokens to Terra-based asset holders. However, the UST coins will not exist on the new Terra platform, and their usage will be limited to the old blockchain.