Rebuilding Global Confidence in Terra Classic through Real-Asset Collateralized Forex Stablecoins
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1. Introduction
Terra Classic was once known for its ambition to bring decentralized stable assets to the world. This proposal marks the next evolution — transitioning from the legacy algorithmic Market Module (MM) to a Collateralized Stablecoin Module (CSM) that anchors value in fiat-backed and asset-collateralized stablecoins, beginning with EUTC, and expanding step-by-step into a global Forex ecosystem of 7.5 trillion $ of daily trading volume. Stablecoin market at the moment is a 50-150 billion $ daily trading volume.
The goal:
Rebuild stablecoin utility safely.
Create on-chain arbitrage and volume.
Reignite global adoption — starting in the European market, and expanding to Asian and emerging gold-based markets.
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2. Phase 1: Controlled Launch with Low-Supply Currencies
We begin gradually, focusing on low-supply, high-utility fiat stablecoins to limit systemic risk and test the CSM framework.
Phase 1 Assets
Stablecoin Region Initial Mint Cap Collateral Source
-EUTC Euro 50000/day Vaulted stablecoin reserves
Each minted stablecoin must be fully collateralized by a combination of:
• Vaulted collateral - whitelisted stablecoins like USDC USDT or PAXG to come with stable route)
• Dynamic mint cap to throttle growth and reduce exposure during initial rollout.
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3. Phase 2: Expansion Toward the Asian Markets
Once EUTC repeg and collateralized, the next strategic expansion targets Asian reserve-driven markets and low cap stablecoins.
Planned Additions
Stablecoin Region Strategic Rationale
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HKTC
Hong kong dollar -
36.4k supply
total value at peg 4,677 USD
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NOTC
Norwegian Krone
31,028 supply
total value at peg 3,026 USD
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PHTC
Philippines Pesos
207,349 supply
total value at peg 3,527 USD
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JPYTC Japan Trusted fiat in Asia, strong trade volume
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CNYTC China Gold-backed expansion synergy
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SGDTC Singapore Crypto-friendly regulatory environment
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AUTC Australia Gateway to Oceania and Pacific trade routes
These expansions build the LUNC Forex Network, providing native liquidity for global trade and on-chain Forex swaps directly within the Terra Classic ecosystem.
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4. Pool Pairing Strategy
Every CSM stablecoin will launch with dual-pair liquidity to guarantee on-chain utility and arbitrage opportunities:
• Stablecoin/LUNC (primary anchor pair)
• Stablecoin/USTC (stabilization and repeg utility)
Example:
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EUTC/LUNC
EUTC/USTC
This design ensures every Forex stablecoin generates both arbitrage pressure and utility volume for LUNC and USTC simultaneously.
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5. Fees and Risk Mitigation
To ensure sustainability and reduce exploit potential, the following dynamic fees will apply during the initial deployment phase.
• 2% Mint Fee → sent to community pool and reserve vault, buys back and vault USTC and LUNC and funds oracle pools
• 4% Redeem Fee → prevents rapid cycling and arbitrage abuse and fund all the above as well 2x
• Daily Mint Cap: adjustable parameter by governance to manage risk exposure and collateral depth. A % of liquidity available in the pools should be in place to prevent being drained. As liquidity grows so does mint caps.
This approach guarantees controlled growth while ensuring continuous community funding.
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6. Required Upgrades and Module Adjustments
To implement this proposal, the following upgrades are required:
6.1 Market Module → Collateralized Stablecoin Module (CSM)
Replace the current Market Module’s algorithmic mint/burn mechanism with a CSM that requires verifiable collateral backing before minting.
• Mint = Deposit USDC/USDT collateral to Vault
• Redeem = Burn stablecoin + pay redemption in USDC
6.2 Fiat Price Oracles
Onchain oracle live fiat prices
• USD, EUR, GBP, JPY, CAD, SGD, AUD, CNY and more.
Ensures real-time (30 sec refresh), accurate conversion and mint ratios.
6.3 Vault Infrastructure
A smart vault system will:
• Lock collateral (USDC USDT, PAXG, etc.)
• Maintain over-collateralization ratios 101-103%
• Track minted outstanding supply
• Automatically rebalance mint caps based on collateral depth and volatility
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7. Economic Impact
• Increases on-chain volume via LUNC + USTC pools.
• Adds new minting/burning pathways tied to real-world fiat demand.
• Restores trust in stablecoin minting via full collateralization.
• Positions LUNC as the global bridge asset for multi-currency swaps.
This model transforms Terra Classic into a global DeFi Forex hub, capable of hosting pegged assets for all major currencies while sustaining LUNC’s deflationary momentum.
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8. Governance Parameters
Parameter Default Adjustable by Gov
Mint Fee 2%
Redeem Fee 4%
Daily Mint Cap % liquidity pools
Collateral Ratio 101-103%
Oracle Source onchain fiat oracle
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9. Vision: LUNC as the Decentralized Forex Hub
By integrating fiat-priced, collateralized stablecoins directly into the Terra Classic economy, this proposal:
• Creates a decentralized Forex exchange layer on-chain.
• Brings real-world trade liquidity to LUNC.
• Positions Terra Classic as the chain of choice for currency-backed DeFi assets.
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10. Conclusion
The LUNC Forex CSM proposal revives Terra Classic’s original vision—this time with real collateral, transparent mechanics, and risk-controlled scaling.
Starting with EUTC, we build credibility through gradual growth, then scale outward into global currencies and Asian markets, ensuring LUNC once again becomes the beating heart of a decentralized, cross-currency financial system.
Wed need :
150K usd in liquidity:
75k in USDC and 75K in LUNC + USTC
(75k usdc to mint eutc(comes back as vaulted collateral)
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2 pools per dex:
EUTC/LUNC 35k
EUTC/USTC 15k
For following stablecoins:
we have 3 tier of stablecoins and we deploy respective amount of liquidity/tier on all 3 dexs
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Tier 1 top 10 fiat currency 50k / dex
Tier 2 emerging fiat currencies 20k / dex
Tier 3 evolving currencies and metals 10k / dex
Tier 4 micro markets 5k / dex
Dev work:
-Adjusting MM parameters
-Vault for collateral
-whitelist admin wallets for swapping and trading
-oracle intergration and testing (every 30 sec)
- “kill switch” in case of extraordinary market conditions to shut down mint redeem functionality.
-estimate work time 2-3 months
Signed
Lunverse Validator & DO Cookie