Terra Classic (LUNC) pumped 75% in the hours following Binance's announcement of the 1.2% burn tax. Almost $1 billion dollars entered Terra Classic, doubling the coin's market cap and bringing it to the 31st largest crypto token.
How much of the LUNC supply has been burned?
According to the most recent figures, 6.9 billion LUNC has entered burn addresses. It's a 2.64 billion increase since the 1.2% burn tax was implemented on the Terra Classic chain.
With a total LUNC supply of 6.9 trillion, LUNC is still a long way from matching the former 350 million supply of LUNA. While the burn tax should hasten the process, keep in mind that people have been destroying LUNC since May.
Only 0.1% of the LUNC supply has been destroyed in four months.
Binance announced that in order to burn all LUNC spot and margin trading fees. Previously, a burn mechanism was only used for deposits and withdrawals.
All trading fees will now be sent to this address, which is known as the LUNC burn address. Fees will be charged in USDT, BUSD, or BNB. They will then be converted to LUNC and deposited to the address.
Binance has also promised to publish a weekly burn report every Tuesday at 00:00UTC. The first burn record calculations have yet to be released. They will be updated one week after the announcement, on October 3.
Will LUNA Classic Burn Its Supply?
The Terra recovery plan launched Luna 2.0, meaning that a Luna burn was not chosen as a method of saving Luna. It had the same effect as a burn in terms of reducing supply, though deciding to restart the chain was a more nuclear approach. This new chain will begin with 1 billion Luna, a significant reduction from 6.5 trillion.
Holders hoped that by burning the Luna, they would increase the scarcity of their coins, pushing the price back towards $1. With supply increasing by 1700% in a matter of days, a massive burn would be required to restore this price.
This appeared to be the method preferred by Binance CEO CZ at first. He has maintained close contact with the Luna team since the partial delisting of Luna on Binance. However, with the support of Binance Luna 2.0, it appears that Binance will not contribute to this burn.
Despite the Terra Luna vote approving a new chain, the majority of the Luna community appeared to prefer a burn. Throughout the voting period, the hashtag #BurnLuna trended on Twitter.
Not everyone in the cryptocurrency community supported the Luna burn. Users have questioned where TerraForm Labs or the Luna Foundation Guard would get the money to do such massive burns, with some Luna holders calling for TerraForm Labs or the Luna Foundation Guard to buy and burn the supply.
In fact, Do Kwon has now says that TerraForm Labs does not have enough money or coins to complete the Luna classic burn of its circulating supply. "Once again, we don't have that kind of money," he explained.
