What is TerraClassicUSD?

TerraClassicUSD (USTC) was originally launched as an algorithmic stablecoin in the Terra ecosystem, intended to maintain a US dollar peg using an automated market mechanism with LUNA (now LUNC). After the Terra ecosystem collapse in May 2022, the core stabilizing mechanism was disabled and USTC no longer maintained its peg to the US dollar.

Since then, USTC has operated as a freely traded digital asset with price determined by market supply and demand. It is no longer functioning as a stablecoin and does not have an active peg-maintenance mechanism. USTC remains used within the Terra Classic ecosystem for purposes such as DeFi applications, gas fees, and trading, and its value fluctuates with market conditions and participation.