The EUTC Plan was designed to initiate a sustainable and secure repeg within the Terra Classic ecosystem – but under a very specific and constrained context.

It’s not a traditional repeg. It’s a hybrid, collateral-based and modular system, built within the real onchain limitations of Terra Classic.

Here’s a detailed overview of the key constraints that shaped the EUTC design.

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1. No LUNC minting allowed

LUNC is the core asset of Terra Classic. Any form of inflation is unacceptable.

The EUTC Plan never mints LUNC – under any circumstances.

The token supply remains untouched and fully preserved.

2. No algorithmic mint/burn between LUNC and stables

After the 2022 death spiral, it was imperative to avoid any automatic mint/burn system between LUNC and a stablecoin.

EUTC is only minted against overcollateralized, locked onchain assets,

with a strict 150% minimum collateral ratio, and no direct algorithmic link to LUNC.

3. Only onchain Terra Classic assets as collateral

To ensure decentralization and independence:

• • No USDC, USDT, ETH or offchain assets are used,

• • Only native Terra Classic tokens (e.g. LUNC, USTC) are accepted as collateral in Phase 1.

4. No selling pressure on Terra Classic assets

The plan had to avoid any protocol-driven selling of LUNC or USTC to maintain a peg.

The EUTC mechanism never relies on selling tokens.

It protects Terra Classic from internal price pressures.

5. Endogenous funding only (no external capital)

All liquidity and incentives come directly from Terra Classic itself, through:

• • The Burn Tax (before the Market Module),

• • The Tobin Tax (after activation), with 20% directed to liquidity pools.

There is no reliance on VC funds or centralized reserves.

6. Transparent and secure minting mechanism

Minting is governed by:

• • Smart contracts that manage collateral and enforce limits,

• • Onchain transparency of all operations,

• • Governance-controlled exceptions, when needed.

Minting is always collateral-backed, fully traceable, and rule-based.

7. Progressive and modular system architecture

At launch:

• • Pool ratios are set manually,

• • Later, they are dynamically adjusted by oracles and the Market Module.

This two-phase approach ensures safety first, then automation.

8. Yield utility without staking

EUTC is designed to be more than a transactional stablecoin:

• • Simply holding EUTC will passively generate yield,

• • There is no need to stake or lock the token.

This encourages long-term holding without reducing liquidity.

9. MiCA-ready structure

The EUTC framework is designed to be:

• • Referencable by a regulated issuer under MiCA in the future,

• • Fully transparent, collateral-backed and auditable.

This opens the door to future legal adoption and real-world integration.

10. Long-term path to USTC repeg

By restoring market confidence, utility, and liquidity with EUTC, the plan sets the stage for:

• A realistic, gradual path to repegging USTC,

• Without shortcuts or unsustainable mechanisms.

It’s about building a stable base first, then tackling the bigger goal.

Conclusion

The EUTC Plan isn’t just another repeg attempt.

It’s a carefully engineered, constraint-driven solution, built to restore trust and stability – without compromising security, decentralization, or the Terra Classic ethos.

Designed to work within real limitations, and to evolve with governance, not centralization.