Leading cryptocurrency exchange Binance has burned a total of 2.65 billion Terra Classic ($LUNC) tokens in its 11th token burn event, effectively reducing the cryptocurrency’s circulating supply. LUNC investors cheered the transaction with buy orders, leading to a small price uptick.
The cumulative amount of LUNC tokens torched by Binance now towers at a staggering 35.5 billion, while the community has set ablaze an astronomical 68 billion tokens. The burn was carried out through a transaction on July 1st, where Binance transferred 2.65 billion LUNC tokens to a burn address, effectively removing them from circulation. The transaction incurred a fee of 13.25 million LUNC.
Terra Classic’s tokenomics employ a mechanism that automatically sends tokens to a dead address every time a transaction is made. The number of tokens sent to these wallets is proportional to the current circulation, guaranteeing a perpetual dwindling of the total token supply, and hypothetically inflating their value as scarcity increases.
As revealed by CryptoGlobe’s previous coverage, Binance orchestrated a burn of 1.04 billion LUNC tokens in June. Binance moved to cut the share of LUNC spot and margin trading fees used to burn tokens from 100% to 50% earlr, with the community maintaining its support for the exchange’s token burns.
It’s worth noting that the original Terra ecosystem collapsed last year and later rebranded to Terra Classic, while a new, forked blockchain took the Terra brand with it. When Terra’s ecosystem collapsed, its circulating supply jumped from 340 million tokens to 6.9 trillion, and to combat the inflation $LUNC supporters have added a 1.2% tax burn on all transactions conducted on the network.
The Terra Classic community, has been battling for increased adoption and even created a petition to get listed on cryptocurrency exchange Coinbase.Over the last few months, LUNC token burns have been growing through several community-led projects, including Terra Casino, Cremation Coin, and DFLunc.
Among some of the developments on the horizon for LUNC are amendments to burn tax regulations, the implementation of a 5% minimum commission fee for validators, and collaboration with the USTC repeg team to establish a USTC test environment.
As CryptoGlobe reported, Binance has supported LUNC’s network upgrades to date, including one that set seigniorage rewards on the network to 0%. Binance has been supporting the network’s token burns, with for example its third batch of burns destroying 2.5 billion tokens, permanently removing them from circulation in a single transaction.
Earlier, in an effort to re-peg TerraClassicUSD ($USTC) to the dollar, the LUNC community mulled over a proposal that involved a mechanism that includes divergence fees on USTC trades that deviate from the peg.
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