Binance, the cryptocurrency exchange, burned the first batch of Terra Classic (LUNC), 5.6 billion tokens, worth about $1.86 million in USDT.
First LUNC burn, $1.8 million ish.
https://t.co/b86RlCYqe3— CZ 🔶 Binance (@cz_binance) October 3, 2022
The company launched an initiative aimed at supporting the coin’s price. The mechanism envisages burning the fees from spot and margin trading in the LUNC/BUSD and LUNC/USDT pairs.
The first batch of coins sent to the burn address covered the period from September 21 through October 1.
“Binance burn just happened, the one the community had been waiting for. The exchange’s fees for the week have been burned. The volume? A meagre $1.8m, 0.09% of market cap,” said the trader using the pseudonym Tree of Alpha.
The @binance burn the $LUNC community was waiting for just happened.
One week’s worth of fees collected by Binance burned.The value? A meagre $1.8m, 0.09% of market cap.https://t.co/azUst9kMj5
— Tree of Alpha (@Tree_of_Alpha) October 3, 2022
According to CoinGecko, over the last 24 hours the price of LUNC fell by 1.4%, while over the week it rose by 2.4%.
The two trading pairs with the token account for about 3.5% of the platform’s total daily trading volume of $12.7 billion. By this metric, LUNC ranks behind only Bitcoin, Ethereum and BUSD.
A crypto trader going by the pseudonym Ogle, in a comment to CoinDesk, described Binance’s scheme as ‘pointless in its direct impact’.
“At such a pace, if one assumes the volume remains as high as it is now (which I doubt), it would take 15 years to reach the goal of complete burning,” he said.
On August 26, 2022, in Terra Classic the v22 update was activated, which provides for a 1.2% transaction tax. The collected cryptocurrency is taken out of circulation, exerting deflationary pressure on LUNC’s supply. In September, Binance supported the decision.
In May, the platform’s CEO Changpeng Zhao disclosed that the company is one of the largest investors in the failed Terra project.
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