The second proposal (#1747) to burn the remaining UST tokens in the community pool has reached a unanimous consensus and is expected to pass on May 26 at 9 p.m. GMT.
The Terra governance system has approved a proposal to burn all TerraUSD (UST) tokens held in the project’s community pool as well as UST used for previous Ethereum liquidity incentives.
This corresponds to more than 1.3 billion UST, or nearly 11% of the current 11.2 billion UST supply according to CoinGecko. The proposition received 99.3% of the total votes cast in its support. Terraform Labs, Terra’s key development firm, will carry out the burn after the vote.
This procedure will be carried out in two stages. First, around 1 billion UST will be sent from Terra’s communal pool to a burn module, where it will be permanently eliminated from the supply.
The team will then manually bridge 370 million UST from the Ethereum network to Terra and destroy them, as described in a Terra governance forum explanatory article.
The proposal to burn UST was passed earlier this month, however it was never implemented due to technical concerns with the plan. “The previous proposal tried to withdraw more from the community pool than was available, and hence the execution failed,” according to the new proposal.
The dollar-pegged algorithmic stablecoin UST dropped from $1 to $0.035 cents earlier this month before returning to $0.048 cents, where it currently trades. This represents a 95.2% drop from its designed price.
The UST burn was accepted a day after Terraform’s revival plan was approved by Terra’s governance system, with more than 65 percent of votes in favor of re-launching the Terra blockchain and creating LUNA 2.0 coins.
The relaunched chain will go online on Friday, followed by an airdrop of the new LUNA 2.0 coins to Terra-based asset holders. The new Terra blockchain, however, will be devoid of UST tokens, and their use will be limited to the original Terra network.