TerraClassicUSD (USTC) is the former TerraUSD (UST), a decentralized algorithmic stablecoin of the Terra blockchain. The rebrand of the blockchain and rename of the token happened after the May 2022 LUNA/UST collapse.
Terra Classic Brief Background
To gain a better understanding of Terra Classic, it’s important to understand the brief history of the original Terra blockchain and the Terra Luna collapse in May 2022.
Terra and Stablecoin
Due to the price volatility of the cryptocurrency market, the demand for price stability is created for crypto investors to conveniently trade, exchange, or invest. This demand led to the emergence of a cryptocurrency category called stablecoins, of which prices are usually pegged to traditional fiat currencies, real-life assets, or other commodities such as US dollars, Euros, metal, etc.
Before the collapse, Terra was an open-source blockchain platform for an algorithmic stablecoin, TerraUSD (UST), which was 1-to-1 pegged to US dollars. That is, 1 UST should equal the value of 1 US dollar, theoretically. The Terra blockchain enables users to instantly spend, save, trade, or exchange UST.
To approach this price stability, Terra came up with a “mint and burn” algorithm, involving UST and its unstable native asset LUNA. The algorithm can be briefly described as follows:
- When UST’s price < $1, users and arbitrageurs may send (burn) 1 UST to the system and receive (mint) $1 worth of LUNA.
- When UST’s price > $1, users and arbitrageurs may send (burn) $1’s worth of LUNA to the system and receive (mint) 1 UST.
Theoretically, for example, as UST goes below $1, holders will burn their UST to mint $1 of LUNA to make a profit. Consequently, the drop in UST market circulation will drive the UST price up, and when UST rises above $1, holders will burn their LUNA to mint UST.
In other words, the price stability should be maintained through arbitrage trading efforts that control the supply and demand of UST and LUNA.
In May, 2022, as the public believed, a large amount of UST was dumped into the market that caused a sudden drop in the UST price, leading to the depeg of the stablecoin. This further caused mass panic in investors who started to sell more UST and mint more LUNA, resulting in a drastic increase in LUNA’s supply in the market circulation. The death spiral led to the crash of LUNA, and nearly 100% of the LUNA market value vaporized within a week. To rescue the Terra ecosystem and rebuild investors’ confidence, after a community vote, the Terra team announced a hard fork to the Terra blockchain.
Hard Fork and Rebrand
As a result, the original Terra blockchain was rebranded as Terra Classic. All balances on the original blockchain remain as they are, and Luna became Luna Classic (LUNC), Terra stablecoins were renamed TerraClassic stablecoins. Among them, TerraUSD (UST) was renamed TerraClassicUSD (USTC).
Click here to read more about Luna Classic (LUNC).
Terra Classic Ecosystem
Terra Classic now supports various protocols. Wallets such as the official project wallet Terra Station, and Leap Wallet both serve the function to facilitate asset and token transfer, transactions, smart contract interactions, etc. Terra Bridge enables cross-chain transfer of all tokens supported by Shuttle, including Terra native tokens, most mAssets, and also other token types from the Terra ecosystem. Terra Classic also supports DEX such as Terraswap and Astroport, while powering the NFT project Galactic Punks.
How to buy USTC?
You can buy USTC on MEXC following the steps:
2. Search “USTC” using the search bar to see the available trading pairs. Take USTC/USDT as an example.
3. Scroll down and go to the [Spot] box. Enter the amount of USTC you want to buy. You can choose from opening a Limit order, a Market order or a Stop-limit order. Take Market order as an example. Click [Buy USTC] to confirm your order. You will find the purchased USTC in your Spot Wallet.
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