The Terra Governance System Approves the Burning of 1.3 Billion UST TokensMay 27, 2022
The Terra governance system has approved a proposal to burn all TerraUSD (UST) tokens held in the project’s community pool as well as UST used for previous Ethereum liquidity incentives.
The request received 99.3% of the total votes cast in its support. In addition, Terraform Labs will carry out the burn after the vote. This procedure will be carried out in two stages. First, around 1 billion UST will be sent from Terra’s communal pool to a burn module, where it will be permanently destroyed from the supply.
Furthermore, the team will then manually bridge 370 million UST from the Ethereum network to Terra and destroy them, as described in a Terra governance forum explanatory article.
The dollar-pegged algorithmic stablecoin UST dropped from $1 to $0.04 earlier this month before returning to $0.04338, where it trades at the time of writing. This is a 93% reduction from its previous value before the loss of dollar parity.
For instance, the UST burn was accepted a day after Terraform’s resurrection plan to re-launch the Terra blockchain and build LUNA 2.0 tokens was approved by Terra’s governance system.
According to the report, the relaunched chain will go online on May 27, followed by an airdrop of the new LUNA 2.0 coins to Terra-based asset holders. The new Terra blockchain, on the other hand, will be devoid of UST tokens and their use will be limited to the original Terra network.