In a single transaction, Binance, the world’s leading cryptocurrency exchange, has destroyed 2.5 billion Terra Classic ($LUNC) tokens, thereby eliminating them from circulation.
The $LUNC tokens were burnt as a reaction to the $LUNC community’s suggestion to burn trade fees on-chain, according to information from Binance’s website. At the time of the burn, the tokens were valued almost $660,000.
The original Terra ecosystem broke early this year and was subsequently renamed Terra Classic, while a newly split blockchain adopted the Terra name. As a result of the collapse of Terra’s ecosystem, its circulating quantity increased from 340 million tokens to 6.9 trillion. To curb inflation, $LUNC supporters have implemented a 1.2% tax burn on all network transactions.
At the beginning of this month, Terra Classic’s price skyrocketed when Binance said it would adopt the burn mechanism to burn all trading fees on $LUNC spot and margin trading pairs. As previously reported, Binance CEO Changpeng Zhao said the exchange burnt around 5.6 billion LUNC tokens during its first burn, which had a value of roughly $1.8 million at the time.
Tobias Andersen, a blockchain expert and senior developer at Bitcoin Suisse AG, has proposed a solution to the uncollateralized TerraClassicUSD token issue. The developer’s approach would recapitalize USTC via the use of quantitative easing and quantitative tightening, “partitioned pools,” and other options.
The cryptocurrency community is positive about Terra Classic in the long term, as price forecasts posted by CoinMarketCap indicate the $LUNC community anticipates a 500% price increase by the end of the year.
Binance’s newest burn coincides with the passage of Proposal 5234 by the Terra Classic community, which cuts the tax burn for on-chain $LUNC and $USTC transactions from 1.2% to 0.2%. The exchange Binance supports the change.
As reported by CryptoGlobe, the Terra Classic community has been fighting for more popularity and has even started a petition to be included on Coinbase.
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