Binance has announced that it will start burning trading fees on Luna Classic. LUNC has surged in response.
The central theses
- Terra Classic’s token is up 35% today.
- The surge follows an announcement by Binance detailing a plan to reduce LUNC trading fees.
- Terra Classic introduced a 1.2% incineration tax on September 20, but difficult market conditions and an ongoing manhunt for Terraform Labs CEO Do Kwon have put severe pressure on the project.
Binance introduced the Burn trading fee after Terra Classic introduced a 1.2% burn tax on all on-chain transactions.
Binance to burn LUNC trading fees
Months after crashing to near zero, Luna Classic is soaring.
According to CoinGecko data, Terra Classic’s native token is up 35% today and trading around $0.0003, buoyed by an announcement from Binance detailing a plan to start burning LUNA Classic trading fees start.
In a blog post Monday, the world’s leading cryptocurrency exchange revealed that it would burn trading fees on the coin’s spot and margin trading pairs. Though the announcement did not confirm the amount that would be burned, it said the blog post would be updated weekly with on-chain data showing the tokens burned.
Binance and other crypto exchanges have been urged to burn LUNC tokens by the so-called “Lunatics” of the Terra Classic community after the Blockchain introduced a major change to their tokenomics last week. On September 20th, Terra Classic introduced a “burn tax” of 1.2% on each transaction to reduce the total supply of the LUNC token from 6.9 trillion to 20 billion.
In theory, the tax should increase deflationary pressures on the token, but it has seen a sharp drop over the past week, even as its supply tumbled. Around 1.8 billion LUNC were burned in the past week, according to data from TerRarity.
That equates to about $540,000 at today’s prices, which is barely enough to cover the market capitalization of Terra Classic of US$2 billion. It’s also worth noting that apart from today’s upleg, LUNC has had a rough month along with the broader crypto market; it’s down nearly 50% since Sept. 8.
CZ Comments on Burn
Binance CEO Changpeng “CZ” Zhao commented on the burn on Twitter (NYSE:) Monday, explaining why the company chose to burn over a previous plan to launch an opt-in transaction burn.
“Charges are converted to LUNC and then sent to the burning address. The burn is paid at our expense, not to the users. This allows us to be fair to all users. The trading experience and liquidity remain the same, and Binance can still contribute to the drop in supply from LUNC, which the community wants.”
It’s been an eventful few months for the Terra community and its key figures since the first iteration of the Terra blockchain and its USTstablecoin suffered a loss of $40 billion in May. Terra then became Terra Classic, and Terraform Labs launched a new blockchain called Terra 2.0, removing the collapsed UST stablecoin.
Terra 2.0’s LUNA token was also up double digits today, breaking through $2.76 after a week-long decline. The rise of LUNC and LUNA comes hours after it was revealed that Terraform Labs CEO Do Kwon has been placed on Interpol for his role in Terra’s collapse.
The Korean entrepreneur last emerged on September 7 to tell his Twitter followers that he was “not on the run”; The Red Notice means he is now a wanted fugitive in 195 countries.
Source: Crypto News Deutsch