- Earlier, the official documentation included a promise that noted 1 UST can always be burned to redeem $1 of LUNA.
- The new official documentation only mentions LUNA.
Terra’s official retail-facing documentation has now removed all mentions of stablecoins or UST. Earlier, the official documentation included a promise that noted 1 UST can always be burned to redeem $1 of LUNA. This development comes amidst a time when the TerraUSD has faced a significant and has plunged to as low as 26 cents.
The earlier documentation had clear mention of Stablecoins, talking about the way Terra Protocol worked. The new official documentation available on its Website only mentions LUNA as Terra Protocol’s native staking token.
The burnt/mint system has always been the foundation of Terra/LUNA’s value. Terra has long used the system to attract investors and now has arbitrarily turned it off by citing governance concerns. Terra, in order to maintain its stable coins’ equilibrium, has always indulged in minting and burning of tokens while also incentivizing arbitrage.
This move by Terra is viewed with suspicion by many as they believe Terra has broken their long-kept promise by bidding farewell to the mint system for the time being. Terra, the protocol behind the UST algorithmic stable coin that has lost its dollar peg, is now planning to increase the available pool of LUNA.
In order to recover from the unprecedented crash faced last week and to help the Terra ecosystem get back on its feet, its founder Do Kwon, has now come up with a revival plan titled LUNA 2.0. Earlier this week, the Life Foundation Guard of Terra deployed resources of approximately $1.5 billion to help stabilize the LUNA price, which, however, did not bear fruit. Terra enjoyed immense prominence and popularity mainly owing to its predictable prices before it faced an unprecedented beating this month