USTC Staking System for Terra Classic

General
1

Signal Proposal: USTC Staking System for Terra Classic

Overview

This proposal explores the introduction of a staking mechanism for USTC on-chain, modeled after the existing LUNC staking system, to reduce circulating supply, stabilize the price, and support for Market Module 2 (MM2) implementation.

Utilizing USTC “Zombie” Pools

We propose leveraging abandoned USTC pools, starting with the following pool:

terra1q00r9whldewsktqne5sux6gtaxn2vlfvu5geej.

This pool contains 15 million USTC paired with a defunct project (C2X), which migrated to a new chain and was delisted from all centralized exchanges (CEXs). The project team provided a migration portal for holders to swap tokens, and officially terminated the C2X-USTC LP staking program on Terra Classic. Relevant details:

If this proposal advances, a window will be provided for any remaining holders to swap their CTX tokens for USTC or remove any residual liquidity from the pool.

Staking Goal and APR

The goal is to stake at least 532 million USTC on-chain, removing it from circulation, with an estimated APR of 1.4%. This would provide sufficient rewards for approximately two years. Additional “dead” pools can be utilized in the future to sustain the system.

Proposed Solution

Governance and Rewards

  • The USTC staking mechanism will not grant governance voting power, only APR rewards.

  • To incentivize validators to run a USTC price feeder (required for Market Module 2), rewards will only be distributed to USTC stakers if their validator operates a USTC price feeder, “similar” to the LUNC staking system.

Motivation

Reducing Circulating Supply

Currently, Binance accounts for ~29% of USTC’s daily trading volume (~200 million USTC), with total daily volume across all exchanges at ~400 million USTC. Staking 532 million USTC would remove approximately 8.8% of the circulating supply, significantly reducing available tokens in the market.

Price Stabilization

Reducing the circulating supply could stabilize and potentially increase the USTC price. Additionally, as the LUNC staking system rewards both LUNC and USTC, a higher USTC price would increase the dollar value of staking rewards, encouraging more LUNC staking. This could create a snowball effect, reducing the circulating supply of both LUNC and USTC, further supporting price stability across the Terra Classic ecosystem.

Preparation for Market Module 2

The staking system would incentivize validators to run USTC price feeders, facilitating the testing and implementation of Market Module 2.

Implementation Steps

  1. Develop test a staking mechanism for USTC on-chain.

  2. Create a USTC price feeder (to be addressed in a separate MM2 proposal).

  3. Audit & Implementation

Community Feedback

This is a signal proposal to gauge community sentiment regarding the USTC staking system. If the community supports this initiative, a detailed technical proposal will follow.

graphustcstake
graphustcstake498×309 53.8 KB

Please provide feedback to help shape the future of this proposal and the Terra Classic ecosystem.

2

Signal Proposal: Community Support for USTC Staking System

Summary

Following the overwhelmingly positive feedback from the community, we are submitting this signal proposal to confirm whether the broader Terra Classic community supports the development and implementation of a USTC staking system.

Proposal

We ask the community to express its support for the concept of a USTC staking mechanism. If this signal proposal passes, BLV Labs will move forward with submitting a PJJ proposal outlining the technical implementation details, security considerations, and associated costs.

Note: At this stage, no funding is requested. This proposal is purely to signal community intent and consensus.

Why USTC Staking?

  • Introduces a new use case and utility for USTC
  • Encourages long-term holding, which could improve market stability
  • Enables reward-based mechanisms aligned with ecosystem growth
  • Creates opportunities for deeper community engagement and adoption
  • supports MM.

Next Steps (If Passed)

  1. BLV Labs will prepare and submit a full PJJ proposal
  2. Technical design, implementation plan, and cost estimates will be included
  3. Open feedback from the community will be integrated prior to development
  4. All work will be done transparently and collaboratively

Conclusion

This is a signal-only proposal.

  • A Yes vote signals your support to explore and develop a USTC staking system
  • A No vote means the community does not wish to pursue this initiative at this time

We appreciate your continued support and look forward to shaping the future of Terra Classic together.

Backround

Signal Proposal: USTC Staking System for Terra Classic

Overview

This proposal explores the introduction of a staking mechanism for USTC on-chain, modeled after the existing LUNC staking system, to reduce circulating supply, stabilize the price, and support for Market Module 2 (MM2) implementation.

Utilizing USTC “Zombie” Pools

We propose leveraging abandoned USTC pools, starting with the following pool:

terra1q00r9whldewsktqne5sux6gtaxn2vlfvu5geej.

This pool contains 15 million USTC paired with a defunct project (C2X), which migrated to a new chain and was delisted from all centralized exchanges (CEXs). The project team provided a migration portal for holders to swap tokens, and officially terminated the C2X-USTC LP staking program on Terra Classic. Relevant details:

If this proposal advances, a window will be provided for any remaining holders to swap their CTX tokens for USTC or remove any residual liquidity from the pool.

Staking Goal and APR

The goal is to stake at least 532 million USTC on-chain, removing it from circulation, with an estimated APR of 1.4%. This would provide sufficient rewards for approximately two years. Additional “dead” pools can be utilized in the future to sustain the system.

image
image492×300 4.8 KB

Proposed Solution

Governance and Rewards

  • The USTC staking mechanism will not grant governance voting power, only APR rewards.

  • To incentivize validators to run a USTC price feeder (required for Market Module 2), rewards will only be distributed to USTC stakers if their validator operates a USTC price feeder, “similar” to the LUNC staking system.

Motivation

Reducing Circulating Supply

Currently, Binance accounts for ~29% of USTC’s daily trading volume (~200 million USTC), with total daily volume across all exchanges at ~400 million USTC. Staking 532 million USTC would remove approximately 8.8% of the circulating supply, significantly reducing available tokens in the market.

Price Stabilization

Reducing the circulating supply could stabilize and potentially increase the USTC price. Additionally, as the LUNC staking system rewards both LUNC and USTC, a higher USTC price would increase the dollar value of staking rewards, encouraging more LUNC staking. This could create a snowball effect, reducing the circulating supply of both LUNC and USTC, further supporting price stability across the Terra Classic ecosystem.

Preparation for Market Module 2

The staking system would incentivize validators to run USTC price feeders, facilitating the testing and implementation of Market Module 2.

Implementation Steps

  1. Develop test a staking mechanism for USTC on-chain.

  2. Create a USTC price feeder (to be addressed in a separate MM2 proposal).

  3. Audit & Implementation

Community Feedback

This is a signal proposal to gauge community sentiment regarding the USTC staking system. If the community supports this initiative, a detailed technical proposal will follow.

Please provide feedback to help shape the future of this proposal and the Terra Classic ecosystem.

3
4

Good. Simple and easy prop, why not.

5

I like it. But I think we should stop earning ustc from the Lunc staking and earn it only in USTC staking. So, the ustc pool distributed in lunc staking should now go to feed the USTC staking pool so APR could be interesting. 1.4 is not bad but not interesting Just holding and take a trade and you make that % in a day. There is no point on distributing USTC for free with the lunc staking if we could distribute only if supply is getting out of circulation in exchange for rewards. Something that is given free will never get any value.