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Today, while Terra founder Do Kwon was in court, a major update came to Terra Classic (LUNC)! Here are the details.
Terra Classic (LUNC) community announced the new Terra Classic Market Module 2.0 (MM 2.0) version. This version stands out with its non-minting process. The new module brings significant changes to the TerraClassic ecosystem without the minting process.
In the new version, the minting process can be carried out with multi-layered restrictions. These restrictions include SDR basis, PRP limits, and daily printing limits based on burn history. These changes aim to reduce inflation risk. The main features of version MM 2.0 are as follows:
This is not a "repeg" proposal. In other words, USTC is not being attempted to be pegged back to 1 dollar. USTC will no longer be treated as a stable asset. There will be no new LUNC minting in swap operations. Instead, a pre-funded pool will be used. This approach replaces the classic "mint and burn" mechanism.
Although many security measures have been taken, if the community expects a very high impact from this mechanism, disappointment may occur.
In the new exchange system, the process will work as follows:
Half of the 0.35% fee taken from each swap transaction is burned, while the other half is transferred to the Oracle Pool. The intense occurrence of swaps only in the USTC-LUNC direction may lead to the depletion of the pool and result in the expected LUNC burn rates falling below the anticipated levels. On the other hand, this situation could speed up USTC burns.
*This is not investment advice.
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