A member of a Terra Classic developer group (the Terra Rebels) by the name of Alex Forshaw sent out a tweet that garnered quite some attention.
In this tweet, he appended a document containing an updated re-peg proposal for restructuring the Terra Classic USD with the use of an Algorithmic Fungible Token (AFT).
The Terra Classic Re-Peg: Updated Proposalhttps://t.co/WuP67sBvih
A HUGE thank you to @edk208 , Max Bryan, and of course the #TerraClassicCommunity . 🙏🙏
— 4lex_4sh4w (@4lex_4sh4w) October 3, 2022The document in Forshaw’s tweet was created by Forshaw himself, Maximilian Bryan, and Edward Kim. All the members of the Terra Rebels. According to this document, the Terra Rebels aim to create a new Algorithmic Fungible Token dubbed “USTN”
Terra Classic Rebels’ AFT
AFTs are similar to cryptocurrencies and other kinds of tokenized assets.
They are also called algorithmic stablecoins but have one key difference from other kinds of tokenized assets:
Instead of being pegged to fiat or other real-world currencies, their value is supported by another crypto asset but is designed to retain a stable price.
The value of AFTs relies on one stablecoin and one crypto asset supporting the aforementioned stablecoin. Meaning that an algorithm (smart contract) controls the relationship between them. Hence the name.
The crypto backing for the AFT the Terra Rebels plan to create will be bitcoin. When this token is created, the group aims to airdrop them to USTC holders. This seems sensible, only that there is a catch.
To achieve this, the Terra Rebels also plan to mint 500 billion extra LUNC to purchase bitcoin. Naturally, the LUNC community disagrees because the price of LUNC is bound to suffer with that many extra coins being dumped into the market.
However, the Terra Rebels’ justification for this plan is that adopting their new AFT will lead to faster LUNC burns and eliminate any adverse effects.
They also calculated that about $5 billion in adopting the new AFT would lead to a burn of about 2.5 trillion LUNC.
What the Terra Classic Community Had to Say
LUNC Burn, a Twitter account dedicated to tracking LUNC burn rates, has described this idea by Forshaw and the others in a response tweet as the “craziest, out of touch with the community” idea.
LUNC Burn also states that doing what the Terra Rebels say is a “step backward” considering all the measures already being implemented.
Doing something like Forshaw suggested would “dump the price” and reverse all the progress so far. LUNC burn also adds that for the Terra Rebels’ plan to work, decentralized and centralized exchanges must list the new coin so it can be traded.
A plan that won’t be straightforward by any means, assuming the LUNC community even got someone to pay for it.
Tokenomics and Price Analysis
Tokenomics on LUNC shows that the cryptocurrency has dropped in price by 7.55% over the last day and currently trades at $0.0003136. The trading volume on LUNC has also declined 1.7% over the past day, at a figure of $825 million.
On the charts, we see a price consolidation around the $0.0003 zone after the price of LUNC hit a low of $0.00029 yesterday (Monday).
LUNC is currently testing the $0.00029 support and may bounce to the upside if the bulls swoop in and push the price higher.
However, if the bears push the price below this support level, a retest of the $0.0002944 level in the coming days is possible.
Disclaimer: The author’s comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)
