Terra Classic Soars as Binance Appeases Crypto’s Lunatics
Binance has announced that it will start burning Luna Classic trading fees. LUNC has surged in response.
- Terra Classic's LUNC token is up 35% today.
- The surge follows an announcement from Binance, detailing a plan to burn LUNC trading fees.
- Terra Classic introduced a 1.2% burn tax on September 20, but rocky market conditions and an ongoing manhunt for Terraform Labs CEO Do Kwon have placed huge pressure on the project.
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Binance introduced the trading 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 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 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 every transaction, with the aim 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 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 September 8.
CZ Comments on Burn
Binance CEO Changpeng “CZ” Zhao commented on the burn on Twitter Monday, explaining why the firm had opted for the burn over a previous plan to launch an opt-in transaction burn. “Fees will be converted to LUNC then sent to the burn address. The burn is paid 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 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 September 17 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.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.