After months of development, debate, and testing — Proposal #12188 has officially passed, activating the long-awaited Market Module 2.0 on Terra Classic.
This isn’t just another patch — it’s a structural evolution of the chain’s monetary mechanics. A “no-mint, burn-heavy” system designed to restore stability to USTC, reignite on-chain swaps, and turbocharge LUNC’s deflationary engine.
Let’s break down what’s changing — and why this moment could redefine the entire Terra Classic ecosystem.
What’s Inside Market Module 2.0
The original Market Module was disabled after the 2022 collapse, when minting mechanics spiraled out of control. Now, the reworked version introduces safeguards, limits, and smart burn distribution to prevent history from repeating itself.
Core features:
- •USTC ↔ LUNC swaps reactivated— Direct swaps between USTC and LUNC are coming back, creating native liquidity and restoring one of Terra’s defining features.
- •0.35% fee — 50% burned instantly— Every swap will trigger a burn event. Half of the transaction fee permanently removes LUNC from circulation.
- •Mint cap = 80% of last 30-day burns (max 100k SDR)— This ensures the system can never over-mint. New liquidity can only be created in proportion to what’s been burned recently — a fully self-regulating feedback loop.
- •Auto-throttle burn algorithm— As supply decreases, the system dynamically adjusts to prevent manipulation, maintaining sustainable deflation over time.
- •Oracle pool funding built in— A portion of swap revenue automatically funds developers and validators — ensuring sustainable growth and rewarding those who keep the chain alive.
Deflation on Steroids
This is where things get exciting. Every swap through the module isn’t just volume — it’s deflation in motion.
With the reactivation of on-chain swaps and the Layer 2 DeFi integrations (Terraport, Juris, Garuda, etc.), transaction activity is expected to rise sharply. More activity means more fees, and more fees mean more LUNC burned automatically.
Analysts estimate that even moderate daily usage could translate to 10+ billion LUNC burned per month, organically — no centralized action required.
This aligns with Terra Classic’s long-term vision: a self-sustaining, deflationary economy powered by on-chain usage, not speculation.
The Builders Behind the Revival
Credit goes to developers like @StrathCole and Orbit Labs, who have led the charge in reviving critical modules and improving interchain connectivity.
The recent v3.6.0 upgrade also introduced:
- •A fix for IBC token handling,
- •Tax-free IBC conversions for LUNC, USTC, and USDC,
- •Expanded support across Terraport, TerraSwap, GarudaDeFi, and other DEXs.
Together, these upgrades reestablish Terra Classic’s position within the Cosmos network, making it interoperable again with external ecosystems.
A Deflationary Future — If the Community Plays Its Part
Market Module 2.0 is more than a technical update — it’s a signal. A message that Terra Classic isn’t just surviving — it’s rebuilding with discipline and transparency.
But for the system to reach its full potential, community participation is key. Every swap, trade, or dApp interaction amplifies the burn cycle — and every transaction brings the ecosystem closer to equilibrium.
The days of waiting for centralized burns are over. Now, every user is part of the burn engine.
Context: Regulation & The Bigger Picture
This upgrade also comes amid a shifting regulatory backdrop. The Edward Kim hearing on November 3rd shed light on the insolvency process linked to the Terraform collapse, while the SEC vs. Do Kwon case inches toward a verdict expected later this year.
These legal outcomes will influence how future Terra-based assets are treated, but they won’t change the technical resilience that the community has rebuilt. With the new module, Terra Classic demonstrates that it can evolve beyond its past, focusing on sustainable tokenomics rather than speculation.
The Road Ahead
As the testnet goes live and mainnet deployment follows, expect a surge in developer testing, liquidity routing, and DeFi integrations.
Combined with the SDK + IBC upgrades and Market Module 2.0, Terra Classic’s infrastructure is now at its strongest point since 2022.
The formula is simple: More swaps → More burns → Less supply → More value.
Terra Classic has flipped the script. This isn’t a comeback story — it’s the start of a new era.