According to CoinDesk, the Terra Classic protocol will cease minting terraUSD (USTC), the notorious token that experienced a 99% drop during the collapse of the Terra protocol in 2022. A community vote on Terra Classic's governance forum, which concluded last week, garnered 59% approval to halt all USTC minting. As of Monday afternoon, the current value of USTC is 1 cent.

Terra Classic is the original network developed by Terraform Labs and has continued as an independent blockchain, unlike Terra 2.0, which is a forked version created following Terra's collapse. TerraUSD was the token at the heart of Terra's downfall, resulting in a 99.9% drop in LUNA token prices, $28 billion being drained from Terra-based DeFi applications, and a subsequent spiral to crypto funds going bust.

Community members believe that stopping USTC minting could help protect users and external investors who are burning USTC to achieve the repeg. Burning refers to the permanent removal of tokens from circulation by sending them to an uncontrolled address. Algorithmic stablecoins like USTC are backed by a basket of assets, such as LUNA and bitcoin (BTC), without relying on any centralized third party to hold those assets. However, most of these tokens fall victim to a 'death spiral,' with outflows or sales of backing assets causing a sudden de-pegging of USTC-like projects. The USTC was intended to be pegged at $1 by this mechanism, and members hoped that burning tokens could eventually allow USTC to reach that goal, although this could require trillions of tokens to be burned.

A small group of engineers is working to restore Terra to its former glory, with a team called the 'Samurai Six' actively developing applications built on Terra Classic and offering rewards for developers working on the network. These efforts aim to eventually drive value to the Terra Classic ecosystem and, hopefully, increase LUNC value over time.