Luna classic (LUNC/USDT) was originally created to be the first Terra blockchain’s native token under the name LUNA, launched in 2018. LUNC is the native token of the Terra Classic blockchain, which imploded this May, wiping out $60 billion in market value; the project’s algorithmic stablecoin lost its peg to the dollar, and LUNC, the token that was supposed to be its stabilizer, fell into hyperinflation.
What is LUNC burn?
LUNC burn is seen as a potential recovery plan for the crashed Terra ecosystem.
LUNC burn is a program initiated by victims of the Terra ecosystem collapse to compensate them for their losses after an unfortunate event.
The goal is to bring the supply down to 10 billion.
Investors are urging themselves to voluntarily send a certain amount of LUNC tokens to burn wallets to reduce the cryptocurrency’s circulating supply.
The move resulted in the burning of many LUNCs within weeks. However, the community believes that if they implement a 1.2% tax burn on all on-chain LUNC transactions, they can accelerate LUNC consumption.
The proposal was implemented on the Terra Classic network last month, and the number of burns has skyrocketed since then. A total of 3.76 billion Luna Classic tokens have been burned per LUNC burn since the 1.2% tax break was launched.
Earlier this month, the LUNC token surged in anticipation of a community-approved plan to reduce the token’s hyperinflated supply.
The so-called “supply burn plan” aims to destroy – burn in crypto terms – 1.2% of every LUNC transaction on the blockchain. The mechanism doesn’t apply to buying and selling tokens on exchanges, MEXC voluntarily decided to adopt the supply reduction mechanism.
The mechanism of LUNC burn
The Terra recovery plan launched Luna 2.0, meaning a Luna burn was not chosen as the way to save Luna. It technically did have the same effect as a burn could in reducing the supply, although deciding to restart the chain was a more nuclear approach. This new chain will launch with 1 billion Luna, a huge decrease from 6.5 trillion.
By burning the Luna, holders hoped this would increase the scarcity of their coins, pushing the price back toward $1. With the supply increasing by 1700% in a few days, a major burn would be needed to restore this price.
1.2% burn tax:
On-chain: interaction, wallet transfer
Off-chain: Centralized exchange transaction fees
It is understood that the 1.2% burn fee is actually divided into two parts: on-chain and off-chain. On the chain, it refers to all interactions in LUNC and transfers between wallets. After September 12, 1.2% will be charged. The proposal was implemented on the Terra Classic network last month, and the number of burns has skyrocketed since then. A total of 3.76 billion Luna Classic tokens have been burned per LUNC burn since the 1.2% tax break was launched.
The ranking of MEXC’s burning volume in the current exchanges
MEXC burns LUNC by repurchasing LUNC and burning it through the transaction fee of LUNC (more details), and MEXC supports LUNC upgrade and burning of LUNC Spot Trading Fees. Multiple cryptocurrency exchanges also contributed to the 13.7 billion LUNC burned in Luna Classic’s total supply. So far, MEXC is the platform with the most LUNC burnt among cryptocurrency exchanges, and the total burning volume has reached 1,005,374,420.218228 LUNC.