The field of algorithmic stablecoins has taken a massive hit after the infamous collapse of the entire Terra ecosystem (including UST).
Following the crash, the community got split into two – those who support the new version of Terra, which retained the name, and those who support the old version of it – Terra Classic.
- Within the past 24 hours, the stablecoin called Terra Classic USD, or USTC, soared by 40%, as uncharacteristic as this may be for a cryptocurrency designed to stay flat.
- This comes as Tobias Andersen filed a proposal to re-peg the stablecoin and hence tackle some of the existing challenges in front of the protocol.
- Titled Terra Classic USTC re-peg proposal, the document proposes to reduce the debt that was accumulated back in May during the “black swan” (as he calls it) event.
- To do so, the blockchain engineer proposes a process to recapitalize the stablecoin by using measures similar to that of quantitative easing (QE) without giving too many specifics on the matter.
- Besides that, Andersen believes that USTC needs to be re-pegged to its original value of $1.