Terra Classic Developer Pitches Proposal That Could Effectively Burn $2M in LUNC While Also Creating A Developers Pool

Alex Forshaw proposes a new plan for $4 million in off-chain assets.

Terra Classic developer Alex Forshaw gave updates about the multisig wallet holding about $4 million in off-chain assets in a medium blog post shared on Twitter yesterday.

Multisig: Material Updates https://t.co/bdL10KfQVm

— 4lex_4sh4w (@4lex_4sh4w_TR) November 10, 2022

For several legal reasons, Forshaw and several other community members who had welcomed the opportunity to become signers to the wallet and manage the funds on behalf of the community have opted out, the developer wrote in the blog. 

The developer now proposes that the community convert the assets to Terra Luna Classic (LUNC) and send it to the burn address. As a legal disclaimer, Forshaw urges that whomever the community saddles with the responsibility be traceable and well-recognized non-US citizens.

While the developer asserts that this process will absolve the community of legal risk, he notes that it does nothing to provide the community with capital that it can efficiently deploy for development. 

To this end, Forshaw proposes $2 million worth of LUNC be minted and sent to an on-chain multisig address for payment of professional developers.

The comprehensive plan burns $4 million worth of Terra and then mints $2 million LUNC from this. So, effectively, it burns $2 million worth of LUNC while providing the community with $2 million worth of LUNC for development.

Community Members Respond

Several users have shut the idea down upon seeing the word mint. It is unsurprising as a majority of the community, largely united by the common goal to reduce the LUNC supply and reclaim lost value lost fortunes in the Terra crash in May due to excess LUNC printing to stabilize TerraClassicUSD (USTC). As a result, LUNC dropped from highs of over $100 to pennies in just a few days.

Meanwhile, others like HappyCattyCrypto have asserted that too many legal risks are associated with the assets. The people who accept the responsibility to burn it may still be held liable, said HappyCattyCrypto. The validator urges the community to forge a new path and abandon the assets.

Terra Rebels member Duncan Day questioned why the community needed to take over ownership of the wallet for the plan to work. Specifically, Duncan wondered why the current holders could not carry out the burn.

However, the reviews were not all negative or critical. For example, one community member described it as a “great idea.”

It bears mentioning that the $4 million in off-chain Terra Classic community assets have remained the subject of intense debates within the community, with contentions surrounding decentralization, efficient allocation of resources, and payment for developers.