Introduction

Since the depeg of USTC in May 2022, the Terra Classic community has been actively searching for a viable, long-term solution to restore trust in its ecosystem.

The EUTC (Euro Terra Classic Unit) Plan proposes a hybrid and innovative strategy to restore USTC’s peg by introducing a new collateral-backed stablecoin, governed onchain and supported by dynamic liquidity management.

The Goal of the Plan

The EUTC Plan aims to:

• • Launch a collateral-backed stablecoin (EUTC) to act as a reference asset for USTC repeg;

• • Create and fund a single strategic liquidity pool (EUTC <> LUNC) on Terra Classic-compatible DEXs;

• • Leverage transparent, onchain mechanisms, governed by the community;

• • Ensure a progressive, controlled, and sustainable repeg process.

Structure of the Plan

1. EUTC: A Fully Collateralized Stablecoin

• • EUTC is backed by an onchain collateral pool composed of Terra Classic-native assets (LUNC, USTC, etc.);

• • It follows a 150% overcollateralization ratio, enforced by a smart contract or L1 module;

• • Each EUTC is fully supported by real, verifiable collateral, limiting emission risks.

2. A Single Core Liquidity Pool: EUTC <> LUNC

• • 100% of the EUTC supply will be injected into the EUTC <> LUNC pool;

• • The initial ratio (e.g., 1 EUTC = 10,000 LUNC) will be set based on market conditions at launch;

• • Liquidity management will be manual at launch, then transition to automated control via the Market Module once active (with oracle-based safeguards).

3. Funding the Pool Through the Burn Tax

The plan includes a reallocation of a portion of the onchain burn tax:

• • Current tax distribution: … 10% to the Community Pool … 10% to the Oracle Pool … The remaining 80% will be split: 30% to liquidity pools, 70% to burn;

• • A testing phase with a reduced burn tax (0.1%) will be introduced to analyze impact on volume, burn rate, and pool funding;

• • The goal is to reach $1,000,000 in liquidity in the EUTC <> LUNC pool within a few months, depending on onchain activity.

4. Collateral Pool Module & EUTC Minting

A dedicated L1 module will manage minting and collateralization:

• • Automatically checks collateral ratios before minting EUTC;

• • Enforces strict overcollateralization (150%) and prevents over-minting;

• • Surplus returns from overcollateralization can be redirected to community funds;

• • Designed to support multiple independent collateral pools over time (e.g., EUTC, KRTC), each with distinct rules.

5. Transition to Tobin Tax and Oracle-Based Automation

Once the Market Module is enabled:

• • The Burn Tax will be replaced by the Tobin Tax (set around 0.35% on average);

• • New fee distribution: … 10% to the Community Pool … 60% to the Oracle Pool … 20% to the Liquidity Pool … 10% to the Collateral Pool;

• • The system will become fully automated, guided by onchain data and real-time oracles;

• • All changes and evolutions remain community-governed.

Why This Plan Stands Out

• • ✅ No reliance on external stablecoins like USDC or volatile assets like BTC (avoiding unnecessary risk);

• • ✅ Onchain transparency and community control at every level;

• • ✅ Intelligent liquidity and ratio management, evolving with the network;

• • ✅ Aligned with the Terra Classic vision: community-first, secure, and sustainable.

Next Steps

1. 1. Release of the full functional whitepaper to the community;

1. 1. Community governance vote to approve the plan and the collateral module;

1. 1. Initial minting and launch of the EUTC <> LUNC pool;

1. 1. Activation of the Market Module and transition to the Tobin Tax.

Conclusion

The EUTC Plan offers a clear, realistic, and forward-looking roadmap for restoring USTC’s peg.

By introducing a collateral-backed stablecoin and building strong liquidity infrastructure around it, the Terra Classic community can move toward a sustainable, decentralized, and autonomous stablecoin system.

This is not just a return to the past — it’s a bold step forward into a new phase of the Terra Classic ecosystem.

👉 Join the discussion, contribute to the build, and help shape the future of Terra Classic.