Terra Classic Reinvents Itself with Market Module 2.0 — No More Minting, Only Burning
While Do Kwon remains tied up in legal battles, Terra Classic has quietly launched one of its most significant protocol upgrades yet: Market Module 2.0 (MM 2.0). And unlike past updates, this one brings real, structural change.
🔄 Major Shift: No More Minting in Swaps
With MM 2.0 now live, swaps between USTC and LUNC no longer trigger new LUNC minting. Instead, the system draws from a pre-funded liquidity pool, drastically reducing inflationary pressure.
🔧 Here’s What MM 2.0 Introduces:
Swap Fee: 0.35%
→ 50% of it is burned
→ 50% goes to the Oracle Pool
Minting is severely restricted going forward
→ Only allowed based on past burn performance
→ Capped at 100k SDR/day, calculated from a 30-day rolling burn average
The update is fully live. No waiting, no proposals in limbo.
Important: This is not a USTC repeg mechanism. USTC remains unpegged — this is purely about restoring economic health.
⚙️ New Mechanics in Action
Now when users swap LUNC ↔ USTC, they interact with the liquidity pool — not freshly minted tokens. That means every swap has economic impact, especially as the pool’s balance shifts over time.
➡️ Too many USTC → LUNC swaps?
Burns will accelerate.
Liquidity could become uneven.
The protocol may adjust behavior to stabilize.
🧠 Why This Matters
For the first time since the Terra collapse, LUNC is no longer inflating via system swaps. That’s real deflation. It marks a tangible step toward a sustainable future — and reflects a community committed to long-term reform, not quick fixes.
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🔍 Quick Summary for LUNC Investors:
✅ No more minting through swaps
✅ Burn-focused, deflationary model
✅ Smart swap mechanism via liquidity pool
✅ New rules = new tokenomics game
Could MM 2.0 be the inflection point Terra Classic needed?