Terra Classic Soars As Binance Appeases Crypto’s Lunatics
Crypto Briefing | Sep 27, 2022 01:55AM ET
Binance has announced that it will start burning Luna Classic trading fees. LUNC has surged in response. Binance introduced the trading fee burn after Terra Classic implemented a 1.2% burn tax on all on-chain transactions. Months after crashing to almost zero, Luna Classic is soaring.
According to CoinGecko data , Terra Classic’s native token is up 35% today, trading at roughly $0.0003, propelled by an announcement from Binance detailing a plan to start burning LUNA Classic trading fees.
In a Monday blog post , the world’s top cryptocurrency exchange revealed that it would burn trading fees on the coin’s spot and margin trading pairs. Though the announcement didn’t confirm the amount it would burn, it said the blog post would be updated weekly with on-chain data showing the burned tokens.
Binance and other crypto exchanges have faced calls from the Terra Classic community’s so-called “Lunatics” to burn LUNC tokens after the blockchain introduced a major change to its tokenomics last week. On Sept. 20, Terra Classic implemented a 1.2% “burn tax” on every transaction, intending to reduce the total supply of the LUNC token from 6.9 trillion to 20 billion.
In theory, the tax was meant to add deflationary pressure on the token, but it saw a sharp drop over the last week even as its supply decreased. According to data from TerRarity , around 1.8 billion LUNC has been burned over the past week.
That’s the equivalent of about $540,000 at today’s prices, which is barely enough to make a dent in Terra Classic’s $2 billion market capitalization. It’s worth noting, too, that LUNC has had a rough month along with the broader crypto market aside from today’s uplift; it’s down almost 50% since Sept. 8.
h2 CZ Comments On Burn/h2Binance CEO Changpeng “CZ” Zhao commented on the burn on Twitter (NYSE:TWTR) Monday, explaining why the firm had opted for the burn over a previous plan to launch an opt-in transaction burn.
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Read market moving news with a personalized feed of stocks you care about.Get The App“Fees will be converted to LUNC then sent to the burn address. The burn is paid at our expense, not the users. This way, we can be fair to all users. The trading experience and liquidity remain the same, and Binance can still contribute to the supply decrease of LUNC, which is what the community wants.”
It’s been an eventful few months for the Terra community, and its central figures since the first iteration of the Terra blockchain and its UST stablecoin suffered a $40 billion wipeout in May. Terra then became Terra Classic, and Terraform Labs launched a new blockchain called Terra 2.0 with the collapsed UST stablecoin removed.
Terra 2.0’s LUNA token also rallied double-digits today, breaking $2.76 after a weeks-long decline. The LUNC and LUNA uptick comes hours after it emerged that Terraform Labs CEO Do Kwon had been placed on Interpol’s red notice list over his role in Terra’s collapse.
The Korean entrepreneur last surfaced on Sept. 7 to tell his Twitter followers that he was “not ‘on the run”; the red notice means he’s now a wanted fugitive in 195 countries.
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