Terra Classic community members are mulling a revival of the ecosystem’s failed terraUSD classic (USTC) nearly a year after Terra’s spectacular implosion.

Terra Classic is the original network created by Terraform Labs, which has continued as an independent blockchain rather than Terra 2.0 - a forked version created in the wake of Terra's collapse.

Discussions on community forums that started in mid-April are describing a model that relies on token buybacks, unidirectional swaps, staking and an “algorithmic peg divergence fee” to address the issues with the original design.

Algorithmic stablecoins like UST are backed by a basket of assets, such as LUNA and bitcoin (BTC), without depending on any centralized third party to hold those assets. However, most of such tokens often fall victim to a “death spiral” – with outflows or sales of backing assets causing a sudden de-pegging of UST-like projects.

(by Stephen Alpher)