What is luna burning and what does burning mean in crypto？A Luna burn of its supply was one proposed idea to help the Luna recovery, but could it still happen?
With the Luna crypto crash seeing the Luna circulating supply skyrocket to over 6.5 trillion coins, several holders wanted to see a Terra Luna burn to decrease this supply and potentially increase its value.
The Terra recovery plan launched Luna 2.0, meaning a Luna burn was not chosen as the way to save Luna. It did, technically, have the same effect as a burn could in reducing the supply, although deciding to restart the chain was a more nuclear approach. This new chain will launch with 1 billion Luna, a huge decrease from 6.5 trillion. By burning the Luna, holders hoped this will increase the scarcity of their coins, pushing the price back towards $1. With the supply increasing 1700% in a few days, a major burn would be needed to restore this price.
Not everyone in the cryptocurrency community was in favour of a Luna burn. With some Luna holders calling for TerraForm Labs or the Luna Foundation Guard to buy and burn the supply, users have questioned where these places would get the money to do such huge burns from. Indeed, Do Kwon has now come out and said TerraForm Labs does not have the funds or coins to burn the Luna circulating supply. "Once again, we don't have that kind of money," he said.
While Luna 2.0 is taking over as the main form of Luna, a separate coin - Luna Classic- still exists and could help to itch this burning desire. LUNC holders will hope burning helps push up the Luna Classic price. Even though the Luna 2.0 crypto exchange list grows, some exchanges previously vowed to burn Luna through their transaction fees. With Luna Classic continuing the old Luna's chain, with a circulating supply of 6.5 trillion, these burns will need to be pretty hefty to make an impact.
As the Luna community continued to demand Luna burns, TFL CEO Do Kwon posted the Luna burn address on his Twitter, which seems to have kickstarted a burn movement.
While Kwon asked why holders would do this, stating it is "literally burning money", this has not stopped holders. According to the explorer, through 4510 transactions, holders have burned 1.48 billion Luna as of July 27. This makes up just making up just 0.016% of the circulating supply.
This article explained what is luna burning and what does burning mean in crypto. Hope you can get a better understanding about cryptocurrency burn.
