The idea stated that by destroying excess supplies, the burn may assist reestablish the UST dollar peg.
According to the idea, the fire will assist “lower the Terra economy‘s outstanding bad debt.” Apart from that, it’s projected to play a key role in restoring the UST dollar peg by removing a considerable amount of excess supply.
The plan was submitted, with a seven-day deadline for completion. However, it was unable to be implemented due to a mismatch between the amount of UST in the community pool and the proposal. This is due to the implementation of another proposal, which resulted in some funds being removed from the pool.
Despite this, the community formed a fresh request on May 20 to continue the blaze. After seven days, the proposal was finally passed, with 153,644,852 votes in favor of burning the UST supply.
MEXC Global, a crypto exchange, has committed to a month-long buyback and burn for LUNA, in addition to community burning efforts to support the initiative. With the trading fees collected from the new LUNA/USDT spot trading pair, the exchange platform committed to acquire LUNA and deliver it to the given wallet address.
Despite having a burn address with the Terra community, Kwon opposes burning. The infamous Terra creator encouraged the “LUNAtics” not to send LUNA to the burning address. According to Kwon, burning has no effect. “Nothing happens,” he told users, “unless you lose your tokens.”
Do Kwon, the founder of Terra, explained that absorbing the stablecoin supply could be a solution to the Terra crisis. As a result, users recommended that the 1 billion TerraUSD saved in Terra’s community pool and the remaining cross-chain UST deployed on the Ethereum blockchain be burned as incentives.
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