Binance, the world’s largest crypto exchange, has been burning billions of Terra Luna Classic (LUNC) tokens in a monthly mechanism that aims to reduce the LUNC supply and increase its value. LUNC is a fork of Terra Luna (LUNA), a blockchain platform that supports stablecoins pegged to various fiat currencies. LUNC was created after a disagreement over the governance of Terra Luna in November 2022.
Binance Burns 33 Billion LUNC Tokens
In the latest batch of the LUNC burn mechanism, Binance burned 1.27 billion LUNC tokens on June 1, 2023, bringing the total LUNC burned by Binance to 33.83 billion. The LUNC burn mechanism is based on the spot and margin trading fees collected by Binance from LUNC traders. The exchange sends a portion of the fees to a burn address, which permanently removes the tokens from circulation.
The LUNC burn mechanism has been running since December 2022, when Binance launched LUNC trading on its platform. Since then, the Terra Luna Classic community has burned almost 55 billion LUNC tokens in total, which is about 55% of the initial LUNC supply of 100 billion. Binance is the top contributor to the LUNC burn campaign, with over 58% of the total LUNC burned.
The LUNC burn mechanism has had a positive impact on the LUNC price, which has increased by over 300% since December 2022. The LUNC price is currently trading at $0.000125, which is still far below the LUNA price of $18.76. However, some analysts believe that the LUNC burn mechanism could create a massive price rally for LUNC in the future, as the supply becomes scarcer and the demand increases.
Binance’s Burn Events are in Support of the Community
The LUNC burn mechanism is also a way for Binance to show its support for the Terra Luna Classic community, which has been facing challenges from the original Terra Luna project. The Terra Luna project has recently launched its Cosmos-based interchain protocol, which allows Terra Luna to connect with other blockchains and expand its ecosystem. The Terra Luna Classic community, however, has rejected this protocol and decided to stick with its own vision of a decentralized and stable platform.
The LUNC burn mechanism is expected to continue until the LUNC supply reaches 10 billion, which is the same as the LUNA supply. This could take several years, depending on the trading volume and fees generated by Binance. The LUNC burn mechanism is one of the most ambitious and innovative initiatives in the crypto space, and it could potentially create a new paradigm for token economics and value creation.
