Terra (Luna) management system, all TerraUSD (UST) tokens held in the project’s community pool and on Ethereum accepted a proposal to burn UST tokens distributed for past liquidity incentives.
Terra (LUNA) Administration Will Burn 1.3 Billion UST
The amount to be incinerated amounts to a little more than 1.3 billion UST. According to CoinGecko data, 1.3 billion of the 11.2 billion UST tokens in circulation will be burned. In the voting, 99.3% of the votes were cast in favor of my burn. After the vote, Terraform Labs, Terra’s main developer firm, will begin to perform the burning process.
This process will take place in two stages. First, approximately 1 billion UST from Terra’s community pool will be sent to an incineration module where it will be permanently removed from the supply. The team will then manually bridge the 370 million USTs from the Ethereum blockchain back to Terra and destroy them.
In the event that happened earlier this month, the price of stablecoin UST, which should normally be equated to $1, dropped from $1 to $0.04.
The adoption of the UST token burn vote came one day after Terra’s management system proposed to reboot the Terra Blockchain and launch the LUNA 2.0 tokens.
The rebooted chain will go live on Friday, after which the new LUNA 2.0 tokens will be airdropped to owners of Terra-based assets. However, the new Terra blockchain will not hold UST tokens and the use of UST tokens will be limited to the original Blockchain.
*Not investment advice.