Based on votes of holders, Terra will burn 1 billion UST in the community pool

In another attempt to support Terra (LUNA) revival, the community voted to burn a large amount of UST in the community pool.

Earlier in May, Terra founder Do Kwon explained that one potential solution to Terra’s collapse would be to absorb the stablecoin supply. In response, users suggested burning the 1 billion TerraUSD (UST) stored in the Terra community pool, and the rest of the cross-chain UST deployed on the Ethereum blockchain as an incentive.

According to the proposal, the burn will help "reduce the outstanding bad debts of the Terra economy." In addition to this, it will also play an important role in restoring the peg to the US dollar by destroying a large amount of excess supply.

The proposal was submitted on May 12 and is expected to be finalized seven days later. However, it failed to execute due to a mismatch between the amount of UST in the community pool and the proposal. This was due to another proposal being executed, causing some funds to be removed from the pool.

Nonetheless, the community came up with another proposal on May 20 to continue the token burn. Seven days later, the proposal finally passed with 153,644,852 votes in favor of destroying the UST supply.

In addition to supporting the project through community burn efforts, crypto exchange MEXC Global has also committed to a one-month buyback and burn for LUNA. The exchange platform promises to purchase LUNA using transaction fees earned from new LUNA/USDT spot transactions and send it to the burn wallet address.

Although Kwon shared a burn address with the Terra community, he was not in favor of burns. The notorious Terra founder warned "lunatics" (LUNAtics) not to send LUNA to the destroyed address. According to Kwon, burning doesn't solve anything. He told users, “Nothing will happen except losing tokens.”