Terra Governance System Passes Plan to Burn 1.3B UST Tokens

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. According to CoinGecko, this corresponds to moreover 1.3 billion UST or nearly 11% of the current 11.2 billion UST supply. The proposition received 99.3% of the total votes cast in its support. Terraform Labs, Terra’s key development firm, 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 eliminated from the supply. 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 cents earlier this month before returning to $0.07 cents, where it currently trades. This is a 93 percent reduction from its previous value before the loss of dollar parity. The UST burn was accepted a day after Terraform’s revival plan to re-launch the Terra blockchain and produce LUNA 2.0 tokens was approved by Terra’s governance system. The relaunched chain will go online on Friday, 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 u...