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The Terra governance system has voted to approve a proposal to burn all TerraUSD (UST) tokens stored in the project’s community pool and UST deployed for past liquidity incentives on Ethereum.
According to CoinGecko, this amount is more than 1.3 billion UST, or approximately 11% of the existing 11.2 billion UST. The proposal received 99.3% of the total number of votes cast. After the vote, Terraform Labs, Terra’s main development firm, will begin burning.
This process will take place in two stages. First, it will send about 1 billion UST from the Terra community pool to the writer, where it will be permanently removed from the proposal. The team will then manually return 370 million UST to Terra from the Ethereum blockchain and destroy them, as detailed in an explanatory post on the Terra Governance Forum.
Earlier this month, the dollar-pegged algorithmic stablecoin fell from $1 to 0.04 cents and then recovered slightly to $0.07, where it is trading now. That represents a 93% drop from its value before the dollar’s parity fell.
The approval of ust burning comes a day after Terra’s management system also approved Terraform’s revival plan to relaunch the Terra blockchain and create LUNA 2.0 tokens.
The restarted network will launch on Friday and then distribute the new LUNA 2.0 tokens to terra-based asset owners. However, the new Terra blockchain will exist without tokens and their use will be limited to the original blockchain.
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