SEOUL, South Korea, Nov. 9, 2021 /PRNewswire-PRWeb/ -- In accordance with Terra proposal #44, which was approved by the community earlier this year, 88,675,000 LUNA from the stablecoin community pool will be burned to mint 4-5 billion UST (depending on its price).
The UST minted from the LUNA burn will be sent to the community pool where community members will have the opportunity to vote on its allocation. The swap will take place over two weeks with exchanges taking place every 800th block. There will then be another governance period after the burn is complete to coincide with the launch of Ozone where community members will decide how much will be allocated to the decentralized insurance protocol.
"The burn will simplify the narrative of Luna economics, boost staking rewards, and leave the community pool well funded with 10 million LUNA," said Terra founder Do Kwon. "After changes implemented by the Col-5 upgrade, all on-chain stablecoin swap fees are routed to the oracle rewards pool for validators and we believe this will keep LUNA staking rewards lucrative."
More details about the burn can be found on the original proposal "Burn all Seigniorage" on Terra's research forum Agora.
About Terra
Terra is an application-specific blockchain built on the Cosmos SDK and Tendermint consensus. The Terra protocol deploys a suite of algorithmic, fiat-pegged stablecoins underpinning a thriving DeFi ecosystem like Anchor, CHAI, and Mirror Protocol. LUNA, the native staking and governance asset of Terra, absorbs the short-term volatility of Terra's stablecoins, with Terra's stablecoin (e.g., UST) demand a function of demand for Terra's DeFi ecosystem -- accruing value to LUNA via seigniorage.
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SOURCE Terraform Labs (TFL)
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