Binance executes first LUNC burn
In a major development, just a few days after the announcement of a burning protocol being undertaken by Binance to shrink the supply of the hyperinflated Terra Classic’s token, LUNC in an effort to bring some relief to investors stuck with that crypto token. It is a mechanism where Binance will burn a part of the fees collected from LUNC trading.
For more details about the first burn and all future burns, please check the announcement linked below for weekly updates moving forward.https://t.co/Depz9nYDVO
— Binance (@binance) October 3, 2022
According to the announcement by the global crypto exchange, Binance has burned $1.8 million worth of trading fees from Terra Classic (LUNC) spot and trading pairs. The exchange has effectively removed 5.6 billion LUNC tokens from circulation. The exchange also stated that the burning mechanism wouldn’t affect the trading fees of LUNC sport and margin trading.
According to data from the LUNC burn tracker (lunc.tech), 13.76 billion LUNC tokens have been burned from its supply. This accounts for 0.199749% of the total supply of Terra Classic (LUNC). However, in the previous 24 hours, 5,600,886,705.6 LUNC have been burned. As a result, over 307,210,647 LUNC has been burned by the new tax burn regime.
Terra Classic’s total supply as of writing is 6.9 trillion LUNC tokens but the number of LUNC tokens burned till date is 7.47 billion LUNC. According to data from lunc.tech, of the total number LUNCs burned is about 3.2 billion in the past 10 days which equates to roughly 300 million LUNC are burned on a daily basis.
Crypto burning is a mechanism whereby cryptos are permanently removed from circulation by sending them to dead wallets or burn addresses thus attempting to improve the scarcity of the asset, making it deflationary, instead of an inflationary asset. This comes in line with Binance’s earlier announcement of the introduction of a 1.2% tax burn regime on LUNC deposits and withdrawals in the form of a consolidation fee.
Additional Read: LUNC Price Prediction
— Binance (@binance) September 27, 2022
On 26 September 2022, Binance said,
“In response to the LUNC community proposal on burning trading fees while maintaining a good trading experience for users, Binance will implement a burn mechanism to burn all trading fees on LUNC spot and margin trading pairs by sending them to the LUNC burn address.”
LUNC price responds positively!
It must be noted from the chart above that the LUNC token has been responding very well to the developments that have been happening in the Terra Classic ecosystem. In the past two weeks alone, LUNC price has rallied nearly 60% as of writing since the announcement of the burn, and even touched over 80% at its highs at the beginning of the month of October.
From a technical standpoint, LUNC price is trading above the 50 day moving average (marked in cyan). Along with that, the Relative Strength Index for LUNC price is currently just shy of 50, but had recently touched near 80 levels. Thus this crypto is well poised for a good breakout if the positive sentiment in the token continues going forward.
Prices as of 4th October 2022.