# TerraClassicUSD (USTC) > TerraClassicUSD (USTC) is a USD-pegged stablecoin on the Terra Classic blockchain, aiming to improve stability over its predecessor, TerraUSD (UST). - Canonical URL: https://iq.wiki/wiki/terraclassicusd-ustc - Categories: Cryptoassets - Created: 2023-11-06T07:32:52.000Z - Last updated: 2023-12-21T10:26:06.505Z - Source: IQ.wiki — the world's largest blockchain and crypto encyclopedia (https://iq.wiki) --- **TerraClassicUSD (USTC)** is a USD-pegged [stablecoin](https://iq.wiki/wiki/stablecoin), aiming to address the shortcomings of TerraUSD (UST). USTC builds off of the fundamentals of UST but introduces essential changes to present an upgraded version, exclusively operating on the [Terra](https://iq.wiki/wiki/terra) Classic [blockchain](https://iq.wiki/wiki/blockchain). [\[1\]](#cite-id-pf7zgb10f7n) # Overview TerraClassicUSD (USTC), formerly TerraUSD (UST), initially launched on the original [Terra](https://iq.wiki/wiki/terra) [blockchain](https://iq.wiki/wiki/blockchain) in 2020, is an algorithmic stablecoin designed for resilience and stability. USTC aims to become stable by diversifying its asset backing as UST lacked real dollar reserves and relied on complex algorithmic mechanisms involving [LUNA](https://iq.wiki/wiki/terra-luna) token burning and [minting](https://iq.wiki/wiki/minting). USTC resides on the Terra Classic blockchain, distinguishing it from UST which is associated with the original Terra blockchain. USTC has gained support from platforms like [Binance](https://iq.wiki/wiki/binance) and [KuCoin](https://iq.wiki/wiki/kucoin), making it accessible to users. [\[1\]](#cite-id-pf7zgb10f7n)[\[2\]](#cite-id-jyx6t4xnij) # History Terra Classic, the original Terra blockchain version, launched in April 2019 by [Terraform](https://iq.wiki/wiki/terraforms) Labs (founded by [Do Kwon](https://iq.wiki/wiki/do-kwon) and [Daniel Shin](https://iq.wiki/wiki/daniel-shin)), aimed to create a global payment system supported by fiat-[pegged](https://iq.wiki/wiki/currency-peg) stablecoins secured by [Luna Classic (LUNC)](https://iq.wiki/wiki/luna-classic-lunc), a floating-rate [cryptocurrency](https://iq.wiki/wiki/cryptocurrency). Terra Classic employed [smart contracts](https://iq.wiki/wiki/smart-contract) for the minting and burning of various stablecoins in response to supply and demand fluctuations. LUNC served as collateral and a [governance token](https://iq.wiki/wiki/governance-tokens), stabilizing the price of these stablecoins. The Terra Classic network also supported [dApps](https://iq.wiki/wiki/decentralized-application) using USTC as a benchmark or medium of exchange. [\[3\]](#cite-id-kklyh3m6y9n)[\[4\]](#cite-id-032rg12atnki) ## May 2022 Collapse In May 2022, Terra Classic experienced a significant collapse when UST lost its peg to the US dollar. A substantial sell-off on major exchanges, triggered by a market crash and liquidity crisis, caused UST's devaluation. This initiated a detrimental feedback loop, compelling the protocol to mint trillions of [LUNC](https://iq.wiki/wiki/luna-classic-lunc) tokens to buy back UST, resulting in hyperinflation and LUNC devaluation. Legal issues led to the arrest of co-founder [Do Kwon](https://iq.wiki/wiki/do-kwon), while [Daniel Shin](https://iq.wiki/wiki/daniel-shin) avoided arrest in South Korea. [\[5\]](#cite-id-gj3mi6t63io)[\[6\]](#cite-id-tgbnrudzzgf)[\[8\]](#cite-id-g1i7bpkhjuc) ## UST Becomes USTC When TerraUSD (UST) lost its USD peg, dropping to $0.68, this prompted a wave of UST liquidity withdrawals from the Anchor Protocol, followed by LUNA minting in an attempt to regain stability. However, these efforts led to hyperinflation, causing a severe devaluation of UST. To revive the project, co-founders initiated a community-led effort, culminating in the creation of a new blockchain, Terra Classic, and the rebranding of TerraUSD (UST) into TerraClassicUSD (USTC). This transition marked Terra 2.0's inception, focusing on [dApps](https://iq.wiki/wiki/decentralized-application) and community ownership, omitting algorithmic stablecoins, and adopting Terra (LUNA) as the sole cryptocurrency. [\[2\]](#cite-id-jyx6t4xnij)[\[7\]](#cite-id-nwld42bkvr) ## Ceasing the Minting Process On September 21, 2023, Terra Classic ceased [minting](https://iq.wiki/wiki/minting) TerraUSD (USTC), following a community vote that garnered 59% approval. TerraUSD's debacle caused a 99.9% drop in LUNA token prices and significant losses in Terra-based [DeFi](https://iq.wiki/wiki/defi) apps. The community's decision to halt minting is aimed at safeguarding users and external investors who are burning USTC to restore its peg. [\[9\]](#cite-id-dbpyq33u8di)[\[10\]](#cite-id-ss3a5ytkkel) ![TerraVotes.PNG](https://ipfs.everipedia.org/ipfs/QmQihvkgMMePSgboiGkvFUsJuKTMNCZWggTSHqctWetsKj)