- 99.39% of community members voted “yes” to the extraordinary “burn”
- Administration to burn 1.3 billion UST to reduce supply and price pressure on LUNA
The Terra quorum voted in favor of Prop 1747 to eliminate 1.3 billion USTs. The initiative was approved by 99.39% of system participants. Thanks to this “bern” the supply of the asset will be reduced by 11%.
Recall, before that there were about 11.2 billion stabelcoins in circulation. Terraform Labs will start burning coins immediately after the voting is completed, that is, in the near future.
The process will take place in two stages. About 1 billion coins will be sent to a pool, where it will be permanently removed from the platform. The developers will then manually transfer about 370 million Stablecoins from the Ethereum ecosystem to Terra, after which they will destroy them.
Prop 1747 has two main goals – to reduce debt and to restore the steiblocoin’s peg to the dollar. In this way, the quorum expects to reduce the price pressure on LUNA, after which the native token’s exchange rate will go up.
The automatic combustion mechanism failed to cope with UST’s inflated supply. This was the reason for the decision to manually liquidate the assets. Earlier we told about the launch of the Terra 2.0 network. It is supposed to be a completely different project, not a hardfork.