Terra Classic Soars While Binance Satisfies Crypto’s Maniacs
Important takeaways
- Terra Classic’s LUNC token is up 35% today.
- The increase follows an announcement by Binance, which detailed a plan to burn LUNC trading fees.
- Terra Classic introduced a 1.2% incineration tax on September 20, but difficult market conditions and an ongoing hunt for Terraform Labs CEO Do Kwon have put enormous pressure on the project.
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Binance introduced the trade fee burn after Terra Classic implemented a 1.2% burn tax on all on-chain transactions.
Binance to burn LUNC trading fees
Months after crashing to near zero, the Luna Classic is firing.
According to CoinGecko data, Terra Classic’s native token is up 35% today and is trading at roughly $0.0003, fueled by an announcement from Binance detailing a plan to start burning LUNA Classic trading fees. In a blog post on Monday, the world’s top cryptocurrency exchange revealed it would burn trading fees on the coin’s spot and margin trading pairs. While the announcement did not confirm the amount it would burn, it said the blog post would be updated weekly with on-chain data showing the tokens burned.
Binance and other crypto exchanges have faced calls from the Terra Classic community’s so-called “Lunatics” to start burning LUNC tokens after the blockchain introduced a major change to its tokenomics last week. On September 20, Terra Classic implemented a 1.2% “burn tax” on each transaction, with the goal of reducing the total supply of the LUNC token from 6.9 trillion to 20 billion. In theory, the tax was meant to add deflationary pressure to the token, but it saw a sharp drop in the past week, even as supply decreased. In accordance data from TerRarity, around 1.8 billion LUNC have been burned in the past week. That equates to around $540,000 in today’s prices, which is barely enough to make a dent in Terra Classic’s market value of $2 billion. It’s also worth noting that LUNC has had a tough month along with the broader crypto market apart from today’s boost; it is down almost 50% since September 8th.
CZ comments on Burn
Binance CEO Changpeng “CZ” Zhao commented on the burn on Twitter Monday, explaining why the firm had chosen the burn over an earlier plan to launch an opt-in transactional burn. “The fees will be converted to LUNC and then sent to the burn address. The burn is paid for at our expense, not the users’,” he wrote. “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 reduction of LUNC, which is what 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 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 gained double digits today, breaking $2.76 after a week-long decline. The LUNC and LUNA rise comes hours after it emerged that Terraform Labs CEO Do Kwon had been placed on Interpol’s red alert list over his role in Terra’s collapse. The Korean entrepreneur last appeared on September 17 to tell his Twitter followers that he was not “on the run”; the red alert means he is now a wanted fugitive in 195 countries.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
