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Terra Classic (LUNC), the original crypto token of the Terra-LUNA blockchain that collapsed back in May, gained over 50% on Tuesday following an announcement by Binance, the world’s largest crypto exchange by volume, that it would support a burn mechanism for the network.
Fast facts
- LUNC was trading up 53.3% in the past 24 hours to trade at US$0.0003029 at 11:30 a.m. Hong Kong time. This remains a far cry from LUNC’s all-time high of US$119 in April when it was among the top ten cryptocurrencies by market capitalization, before the multi-billion dollar collapse of the Terra-LUNA stablecoin project in May.
- In the announcement, Binance said its new mechanism would burn all trading fees on LUNC spot and margin trading pairs by sending them to a dedicated LUNC burn address. The exact amount to be burned will be updated each week.
- In the crypto industry, to “burn” a token is to essentially destroy it to take it out of circulation in the hopes of raising or stabilizing the token’s price by reducing the available supply.
- Binance’s move follows another plan approved by the LUNC community which came into effect on Sept. 21 to burn 1.2% of every LUNC transaction on the blockchain. Since that time 6.1 billion LUNC tokens have been burned.
- As Binance has quite low transaction fees, some industry analysts have pointed out this move will have little impact on the token’s price overall. Binance customers are able to opt-in to the 1.2% burning mechanism if they choose to.
- LUNC gained over 180% earlier in the month to reach US$0.0005888 — the token’s highest price since the May collapse — as the community’s burn plan was announced, continuing to fall in price before its significant gains on Tuesday.