$LUNC EUTC Repeg proposal, if approved, will bring at least four explicit benefits to the LUNC ecosystem:
1.
Directly create deflationary scenarios
As EUTC can only be collateralized with LUNC, any issuance of euro stablecoins is equivalent to locking an equal amount of LUNC in a contract; upon redemption, the contract will return the LUNC to the user and destroy the corresponding EUTC. Locking and repeated turnover will continuously 'extract' LUNC from circulation, forming native on-chain buying pressure and passive balance sheet reduction, which is more sustainable than merely relying on exchange burns.
2.
Add 'interest generation' scenarios to LUNC
The collateral pool can derive income from a 'collateral debt warehouse' style:
Users lock LUNC to mint EUTC → Invest EUTC in DEX for market making or lending → Earn fees/interest;
Subsequently, if governance introduces a 0.1–0.3% minting/redemption fee, 10% of the fees will flow into the insurance fund, while the remaining portion can be used to repurchase LUNC and distribute it to collateral providers, creating a positive cycle.
This transforms 'holding LUNC' from a single governance token into an interest-generating, leveraged asset, increasing capital retention rates.
3.
Expand foreign exchange demand and increase on-chain TVL
The demand for euro stablecoins in Europe, Africa, and cross-border trade scenarios is enormous. If EUTC can launch EUR trading pairs on Cosmos DEXs like Osmosis and Crescent, it will bring external euro liquidity into the Terra Classic chain, driving overall TVL and trading fee growth, with all routes needing to pass through the LUNC collateral layer.
4.
Regulatory friendly, reducing SEC 'securities' concerns
The proposal clearly positions LUNC as a 'collateralized commodity' rather than an 'interest-bearing investment contract', and the stablecoin issuer is an on-chain DAO rather than a centralized entity, aligning with U.S. regulatory agencies' definition of 'decentralized collateralized stablecoins', which can mitigate the risk of LUNC being reclassified as a security to some extent.
In summary, the EUTC Repeg effectively empowers LUNC as an 'on-chain euro central bank': it not only provides continuous destruction/locking scenarios but also opens up narratives for foreign exchange and revenue, while also optimizing compliance narratives, and is viewed as the most imaginative 'new use' proposal for the community in 2025.
1.
Directly create deflationary scenarios
As EUTC can only be collateralized with LUNC, any issuance of euro stablecoins is equivalent to locking an equal amount of LUNC in a contract; upon redemption, the contract will return the LUNC to the user and destroy the corresponding EUTC. Locking and repeated turnover will continuously 'extract' LUNC from circulation, forming native on-chain buying pressure and passive balance sheet reduction, which is more sustainable than merely relying on exchange burns.
2.
Add 'interest generation' scenarios to LUNC
The collateral pool can derive income from a 'collateral debt warehouse' style:
Users lock LUNC to mint EUTC → Invest EUTC in DEX for market making or lending → Earn fees/interest;
Subsequently, if governance introduces a 0.1–0.3% minting/redemption fee, 10% of the fees will flow into the insurance fund, while the remaining portion can be used to repurchase LUNC and distribute it to collateral providers, creating a positive cycle.
This transforms 'holding LUNC' from a single governance token into an interest-generating, leveraged asset, increasing capital retention rates.
3.
Expand foreign exchange demand and increase on-chain TVL
The demand for euro stablecoins in Europe, Africa, and cross-border trade scenarios is enormous. If EUTC can launch EUR trading pairs on Cosmos DEXs like Osmosis and Crescent, it will bring external euro liquidity into the Terra Classic chain, driving overall TVL and trading fee growth, with all routes needing to pass through the LUNC collateral layer.
4.
Regulatory friendly, reducing SEC 'securities' concerns
The proposal clearly positions LUNC as a 'collateralized commodity' rather than an 'interest-bearing investment contract', and the stablecoin issuer is an on-chain DAO rather than a centralized entity, aligning with U.S. regulatory agencies' definition of 'decentralized collateralized stablecoins', which can mitigate the risk of LUNC being reclassified as a security to some extent.
In summary, the EUTC Repeg effectively empowers LUNC as an 'on-chain euro central bank': it not only provides continuous destruction/locking scenarios but also opens up narratives for foreign exchange and revenue, while also optimizing compliance narratives, and is viewed as the most imaginative 'new use' proposal for the community in 2025.