12156 | FINAL On-Chain Signaling Proposal To Burn 1.86B USTC Held In LFG Via Chain Upgrade
Source from:
- https://validator.info/terra-classic/governance/12156
- https://common.xyz/terra-luna-classic-lunc/discussion/26620-final-onchain-signalling-proposal-to-burn-186b-ustc-held-in-lfg-via-chain-upgrade
Introduction
To successfully burn the 1.86 billion USTC held in LFG, we must coordinate a seamless upgrade—not just on-chain but also with the relevant centralized exchanges (CEXs). A failed chain upgrade due to governance misalignment is not a risk we can afford, especially given the magnitude of this burn. This proposal serves as a crucial precursor vote to ensure a well-coordinated, successful upgrade. By securing alignment across validators, governance participants, and CEXs, we can execute this burn efficiently and maximize its impact on the ecosystem.
First Sentiment Proposal Summary
Following the exit of Terraform Labs (TFL) from the crypto ecosystem, the governance community is now fully responsible for decisions regarding the 1.86B USTC held in the Luna Foundation Guard (LFG) reserve. Development work to enable the burning of these assets has already been completed. This proposal seeks to gauge the sentiment of delegates and validators regarding the execution of a chain upgrade to burn the USTC. Should this signaling proposal pass, a structured timeline will be followed, including a three-week notice period for centralized exchanges (CEXs) before initiating the seven-day final on-chain vote to implement the upgrade.
First proposal: https://common.xyz/terra-luna-classic-lunc/discussion/26177-burn-186b-ustc-via-chain-upgrade-signalling-proposal
Background
The final judgment regarding Terraform Crypto Assets (USTC, MIR, ANC, LUNC, wLUNA, KRTC, and LUNA 2.0) explicitly states that these assets are excluded from liquidation. The court order mandates that private keys to wallets holding these assets be burned or destroyed rather than liquidated. With the liquidators having addressed all assets in the LFG reserve except BTC, USTC, and LUNC, it is now up to the community to decide the fate of the 1.86B USTC.
https://storage.courtlistener.com/recap/gov.uscourts.nysd.594150/gov.uscourts.nysd.594150.272.0.pdf
https://storage.courtlistener.com/recap/gov.uscourts.nysd.594150/gov.uscourts.nysd.594150.273.0.pdf
Proposal Details
This proposal serves as a final on-chain sentiment check before proceeding with a chain upgrade to burn the 1.86B USTC in the LFG reserve. Development efforts to facilitate this upgrade have already been completed, with the necessary changes implemented in the Terra Classic codebase.
Should this proposal pass, the following timeline will be observed:
- CEX Notification Phase: A three-week notice will be given to all necessary centralized exchanges (CEXs) and stakeholders to prepare for the upgrade.
- Final On-Chain Vote: A seven-day governance vote will be initiated after the 3 week notification phase to formally approve and execute the chain upgrade.
- Upgrade Execution: Upon successful approval, the upgrade will be deployed to burn the 1.86B USTC held in the LFG reserve.
Voting Options
- Yes: You support moving forward with the chain upgrade to burn the 1.86B USTC and agree with the structured timeline.
- No: You do not support this proposal.
- Abstain: You will contribute to the quorum but choose not to take a stance.
- No with veto: Reject the proposal and forfeit the proposal deposit.
