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TerraClassicUSD FAQ
TerraClassicUSD (USTC), previously known as TerraUSD (UST), is the decentralized and algorithmic stablecoin of the Terra blockchain. It was created to deliver scalable DeFi solutions across chains. After the UST depeg and subsequent migration to Terra 2.0, UST is renamed to USTC and continues trading on the old Terra Classic Blockchain.
Unlike other stablecoins, the USTC price is not backed by a reserve of stable assets. Instead, USTC is an algorithmic stablecoin with prices maintained by Terra's market module algorithm. If the demand for USTC is higher than its supply, the price of USTC surpasses its dollar peg. In this case, the Terra protocol incentivizes users to burn LUNC and mint USTC, thereby increasing the supply of USTC to match the market demand and restore its peg.
On the other hand, if the USTC supply is higher than the market demand, it falls below its peg. Here, users are incentivized to burn USTC and mint LUNC, reducing the USTC supply.
Easily buy USTC tokens on the OKX TR cryptocurrency platform. Available trading pairs in the OKX TR spot trading terminal include USTC/USDT.
You can also swap your existing cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and USD Coin (USDC), for USTC with zero fees and no price slippage by using OKX TR Convert.
Dive deeper into TerraClassicUSD
TerraClassicUSD (USTC), previously known as TerraUSD (UST), is the decentralized and algorithmic stablecoin of the Terra Classic blockchain, created to deliver scalable DeFi solutions across chains. USTC is the name and ticker symbol of TerraClassicUSD.
Popular stablecoins like Tether (USDT) and USD Coin (USDC) are controlled by centralized companies. Conversely, USTC is an algorithmic stablecoin aiming to build a fully decentralized finance ecosystem.
To mint USTC, you must burn the equivalent USD amount of Luna Classic (LUNC). Terra's market module algorithm always allows you to trade 1 USD worth of LUNC for 1 USTC and vice versa, regardless of the market price of USTC. Arbitrageurs are, thus, incentivized to maintain the price of USTC every time the value of USTC fluctuates from the pegged price.
Terra has a list of other algorithmic stablecoins pegged to their fiat counterparts. For example, TerraKRW (KRT) tracks the South Korean Won. You can swap between Terra stablecoins with minimal fees, allowing you to exchange international currencies easily.
USTC price and tokenomics
USTC stablecoin does not have a capped supply. Instead, new USTC tokens enter into circulation when LUNC tokens are burned. After the UST depeg, UST is now known as USTC and only trades on the old Terra Classic blockchain.
Similarly, the original LUNA token is renamed Luna Classic, while the new Terra 2.0 token takes the name LUNA. Terra LUNA and most of its DeFi DApps migrated to the new Terra 2.0 chain. According to co-founder Do Kwon, USTC will not be migrated to the new Terra chain, and there will be no updated version of the algorithmic stablecoin.
About the founders
Daniel Shin and Do Kwon founded Terraform Labs in 2018. The Terra Alliance, a group of e-commerce companies in South Korea, incubated this software development company. Terraform Labs launched their USD-pegged stablecoin TerraUSD in September 2020.
Shin is a Wharton School graduate. Before creating Terra, he founded the leading e-commerce platform TMON, startup incubator Fast Track Asia and the popular Chai Payment app.
On the other hand, Kwon, a Stanford graduate, worked in Microsoft's natural language processing team. In 2019, he was also featured in the Forbes 30 Under 30 list.
Terra raised 58 million USD as of January 2021. Later, in their July 2021 funding round, they raised another 150 million USD. Their investors include big names like Pantera Capital, Galaxy Digital, and Coinbase Ventures, to name a few.
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