Terra UST (USTC) Surges 66% on Relinking Proposal

• Terra UST (USTC) has surged 66% following a governance approval to re-peg the stablecoin.
• The Terra Classic community passed a proposal to relink LUNA Classic and the de-pegged USTC stablecoin.
• Strategies to restore USTC to its peg include holding reserves in multiple assets, implementing a buyback and burn mechanism, paying out interests in US dollars, and integrating multiple oracle systems.

The Terra Classic community recently passed a proposal to relink LUNA Classic and the de-pegged USTC stablecoin, leading to a surge in the Terra UST (USTC) stablecoin. Following the approval, USTC surged 66%, with Terra Classic (LUNC) also up 17.3%.

The collapse of the Terra empire in May 2022 resulted in the algorithmic stablecoin UST and sister token LUNA collapsing below zero. To restore the ecosystem, the tokens were rebranded to LUNA Classic (LUNC) and USTC.

In an effort to restore the USTC stablecoin to its peg, the Terra Classic community has been considering various proposals. The approved proposal to relink USTC and LUNC seeks to restore USTC to peg through a combination of strategies.

First, the proposal includes holding reserves in multiple assets and currencies to provide liquidity to the USTC stablecoin. Second, a buyback and burn mechanism will be implemented to regulate the supply and demand of USTC. Third, to incentivize holders to keep USTC when it is below peg, interests in US dollars will be paid out. Lastly, to reduce the risk of manipulation by a single oracle, multiple oracle systems will be integrated to provide exchange rate data.

The efforts to restore USTC to its peg is being met with optimism from the Terra Classic community. USTC is currently trading at $0.0399, and with the approved proposal, it is expected to reach its peg in the coming weeks. With the news, the Terra Classic community looks forward to the full restoration of the ecosystem.