In a significant development within the cryptocurrency space, the Terra Classic community has decisively rejected a proposal aimed at increasing the number of validators on the blockchain from 100 to 130. This proposal, which some viewed as an initial step towards merging with the Terra (LUNA) community, was seen as a critical move following Terraform Labs and Do Kwon’s agreement to settle with the U.S. Securities and Exchange Commission (SEC) for $4.5 billion. However, the community’s resistance underscores a broader reluctance to embrace such changes, at least for now.
The proposal, officially titled Proposal 12116, “Increase Validator Active Set to 130,” failed to achieve the necessary support in the governance voting process. Despite the proponents’ arguments that expanding the validator set would enhance the network’s decentralization and benefit the Terra Classic (LUNC) community, the voting results told a different story. The proposal garnered only 30.59% of “Yes” votes, while 46.17% voted “no” and 22.59% abstained.
Among the top validators who opposed the proposal were influential entities such as Allnodes and Luna Station 88. These validators voiced concerns about the n12116,k’s readiness to accommodate additional validators. All nodes, in particular, highlighted that the amount of LUNC required to join the active set is not currently burdensome, suggesting that the network’s infrastructure might not yet support such an expansion effectively.
The rejection of this proposal is a clear indication of the Terra Classic community’s cautious approach. Despite the potential benefits of increased decentralization, the prevailing sentiment is that the network is not yet prepared for such an integration, especially in light of the recent SEC settlement involving Terraform Labs. This decision emphasizes the importance of ensuring robust infrastructure and readiness before undertaking significant changes.
Interestingly, this development did not deter positive market movements for Terra Classic ecosystem tokens. Following the proposal’s rejection, LUNC and USTC prices experienced notable gains, seemingly defying broader market sentiments. LUNC’s price surged by over 10% within 24 hours, trading at $0.00008246. The trading volume for LUNC also saw a 50% increase over the same period. Similarly, USTC’s price jumped more than 5%, with its trading volume rising by 136%.
These price movements were accompanied by a rise in futures open interest for both LUNC and USTC. LUNC futures open interest increased by 24% in just four hours, while USTC futures open interest rose by over 21%. This surge in open interest suggests a possible market reversal, indicating a renewed interest and confidence among investors despite the community’s rejection of the validator expansion proposal.
In summary, the Terra Classic community’s decision to reject the proposal for increasing validators reflects a cautious and measured approach to network evolution. While the community remains wary of integrating validators from Terra (LUNA) at this stage, the positive price movements of LUNC and USTC highlight ongoing investor interest and confidence in the ecosystem’s potential. As the situation evolves, stakeholders will be closely monitoring both community sentiments and market responses.