Luna Classic, Remnant of Terra Collapse, Jumps 60% as Binance Unveils Burn Scheme
Luna classic (LUNC), the remaining token of the failed Terra Blockchain before its reboot, surged on Monday after Binance, the world’s largest crypto exchange, unveiled a scheme to reduce the supply of the token. According to cryptocurrency price tracker CoinGecko, the price of LUNC jumped 60% on the news, reaching $0.00032. The token was changing hands at around $0.00029 at press time. The sudden rally caught many traders by surprise.especially since many of them had bet that the price of LUNC would fall on the news that Interpol had issued a “red notice” for Terra’s founder, Do Kwon. What has been released? About $1.5 million of short positions were liquidated during the day. The most in at least three months. according to Quinglass.
Luna Classic, Remnant of Terra Collapse, Jumps 60% as Binance Unveils Burn Scheme
The collapse of the Terra ecosystem in May was one of the most dramatic impacts on the crypto market. It wiped $60 billion in market value and caused some crypto firms to go bankrupt. Earlier this month, South Korean authorities issued an arrest warrant for Kwon on fraud charges.
Many developers who were building applications on the original and now-abandoned blockchain have moved to the newly rebooted Terra blockchain or other networks like Polygon or Kadena that are seen as having more staying power. At least one analyst has suggested that LUNA is now a “meme coin,” with few use cases beyond speculation and providing traders with quick profits (or losses).
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 – in crypto terms – 1.2% of every LUNC transaction on the blockchain. The mechanism does not apply to the purchase and sale of tokens on exchanges.but some crypto exchanges such as MEXC decided to voluntarily adopt a supply reduction mechanism.
The burn scheme Binance just announced, however, may have less impact than many traders hoped.
According to a statement, the crypto exchange will destroy the equivalent of trading fees when a trader buys or sells LUNC. Traders on Binance can choose to voluntarily apply a 1.2% “burn fee”. Given that trading fees on Binance range from 0.1% to a minimum of 0.02% for large traders.the burn rate is only a fraction of the 1.2% transaction burn rate.
Crypto trader Ogle indicated in a Twitter post that traders who move the most volume on the exchange, such as market makers. are unlikely to voluntarily opt into the 1.2�e. Binance’s burn scheme is “almost completely useless to LUNC people, but they don’t realize it,” he said.
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