Terra Classic Team Connects With Binance on USTC Re-peg, LUNC to $1?

Binance Announces Support for Terra (LUNA) Phoenix Software Upgrade

The algorithmic stablecoin TerraClassicUSD (USTC), formerly TerraUSD (UST), whose ecosystem collapsed has aroused optimism among members of the Terra Classic community. On Wednesday, a well-known community member named Redline Drifter revealed that the Quant Team, which focuses on USTC re-pegging, has connected with Binance, the biggest cryptocurrency exchange in the world.

With regard to executing the newly approved USTC re-peg proposal, he stated, “A direct line of communication has been opened between Binance and the USTC Quant Team.” He also shared a snapshot showing the progress made with other leading CEXs and DEXs.

Notably, the Quant Team has recently opened a strategic line of communication in an effort to address Binance’s concerns with the planned divergence tax protocol as the community works to bring USTC parity with the dollar. 

As Drifter stated, “We’re investigating the infrastructure issue in detail and will be looking to see if we can provide the solution or possibly apply the divergence algo differently to avoid the issue.”

Related Reading:  Terra Classic’s Proposal to Appoint Binance’s CZ as LEADER Sparks Controversy

Divergence Protocol to Achieve a Sustainable USTC Re-peg

For background, Drifter suggests the divergence protocol as one of the essential strategies for achieving a long-term USTC re-peg. The divergence protocol, as he put it, “works by charging an algorithmic/dynamic fee equal to the price difference between the peg and market price.”

In other words, the previously described mechanism entails imposing divergence penalties on USTC trades that are either below or above the $1 peg. Drifter also suggested that the fees earned be used to repurchase the LUNC tokens and then burn them to reduce the supply of the asset.

Drifter emphasized that in order for this strategy to be successful, the protocol must be used on all exchanges where USTC is traded, including both on-chain and off-chain CEXs and DEXs. 

Several Exchanges Acknowledge the USTC Re-peg

According to his Wednesday post, a lot of effort has been done toward adding USTC re-peg procedures on top of CEXs and DEXs. The re-peg initiatives have received recognition and interest from several companies, including Binance, Kucoin, Huobi, MEXC Global, and Terraswap.

Drifter also disclosed that KuCoin’s technical division is now examining the USTC re-peg request and will respond further when it is finished. The Quant Team had finished early consultations with Binance, KuCoin, and Terraswap DEX, he continued. 

However, according to Drifter’s snapshot, the Kraken, Uniswap, OKX, and Superex exchanges have not yet fully accepted the USTC re-peg proposal. Unusually, no exchange has objected to the news, suggesting that all major trading platforms might be in favor of the recently passed USTC re-peg proposal.

What Does This Mean for LUNC?

Following the huge collapse of the Do Kwon-founded Terra ecosystem in May, the price of LUNC has not yet fully recovered.

Strategic developments like the re-peg of USTC to $1 and the relaunching of the ecosystem’s DeFi platform Terraport could cause the price of LUNC to recover and begin to rise. Burns and staking are two other good ideas that can be helpful in the project’s revival effort.

This explains why Classy decided to spend all of his validator’s commission before the end of the year. Similar to how Binance has been burning LUNC on a regular basis to assist the Terra Classic community, their most recent burn consuming 2.6 billion LUNC. 

Notably, at the time of writing, the asset is trading at $0.000086. With increases of 3.54% and 1.27% over the previous day and the previous seven days, respectively, LUNC has been gaining speed. But over the last 30 days, the asset’s value has dropped by more than 12%.

Terra Classic is up 3.54% in the last 24 hours. Source: CoinMarketcap

Read Also: Terraport Accused of Incompetence as Stolen Terra Classic Funds Moves to Tornado Cash

Disclaimer: The information in this article should not be considered financial advice, and FXCryptoNews articles are intended only to provide educational and general information. Please consult with a financial advisor before making any investment decisions.

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