In 2021, LUNA and TerraUSD (UST) were among the largest cryptos by market capitalization. However, the UST suddenly lost its peg to the US dollar, causing the token LUNA. After its spectacular collapse, it returned as TerraClassicUSD (USTC). As the USTC takes a long time to regain its former glory, a developer comes up with a revival plan. Check out the recent proposal submitted to the Terra Classic community to allow USTC to reach 1 dollar.
Is Tobias Andersen’s plan viable?
Tobias Andersen recently offers a plan to help the USTC stablecoin get traded at $1 again. However, the Terra developer’s proposal contains significant flaws. The latter urged the community to work for the stablecoin to regain and maintain its value of 1 dollar. Tobias’ idea is that we should encourage new companies to use the Terra Classic blockchain.
To do this, it will be necessary to deploy a mechanism to burn the tokens USTC. There should also be lock-up periods for the staking of LUNC and create a number of other mechanisms. The problem is that there is no real system to stabilize prices on the Terra Classic network. This makes the stablecoin USTC highly volatile, which makes it clear that Andersen’s plan is not not really viable.
Also, there is no explanation of how implementing each of the proposed solutions will help USTC reach $1. Tobias Andersen also did not explain how the stablecoin could maintain this value and its peg to the dollar. That said, TerraClassicUSD (USTC) saw a 57% surge on Binance, after the publication from developer Tobias Andersen. Its price rose from $0.029 to $0.045.
Shortly after rising, the USTC fell to $0.039, representing a 12% drop. But currently, the stablecoin is trading around $0.06, according to CoinMarketCap. Meanwhile, data from the CoinGecko platform reveals that USTC has risen 592% since dropping to $0.006 in June.
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