Terra Classic soars as Binance appeases Crypto crazies

Months after collapsing to near zero, Luna Classic takes off.

According to data from CoinGecko the native Terra Classic token is up 35% today to about $0.0003, following an announcement from Binance detailing a plan to start burning transaction fees on LUNA Classic. On its blog Monday Binance revealed that it would burn transaction fees on the coin’s cash and margin trading pairs. While the announcement did not confirm the amount it would burn, it said the blog post would be updated weekly with data on the channel showing the tokens burned.

Binance and other crypto-currency exchanges have faced calls from so-called “Lunatics“Terra Classic community to start burning LUNC tokens after the blockchain introduced a major change in its tokenomics last week. On September 20, Terra Classic implemented a “burn fee” of 1.2% on each transaction, in an effort to reduce the total supply of the LUNC token from 6.9 trillion to 20 billion. In theory, the tax was supposed to add deflationary pressure to the token, but it has seen a sharp decline over the past week, even as its supply has decreased. According to TerRarity’s data, about 1.8 billion LUNC were burned in the past week. That’s the equivalent of about $540,000 at today’s prices, which is barely enough to make a dent in Terra Classic’s $2 billion market cap. It’s also worth noting that LUNC has had a rough month, as has the crypto market as a whole, outside of today’s surge; it’s down nearly 50% since September 8.

CZ comments on Burn

Changpeng “CZ” Zhao, CEO of Binance commented on the burn on Twitter on Monday, explaining why the firm opted for the burn versus a previous plan to launch an opt-in transaction burn. “Fees will be converted to LUNC then sent to the burn address. The burn is paid for by us, not by the users“, he wrote. “This way we can be fair to all users. The trading experience and liquidity remain the same, and Binance can still help reduce the supply of LUNC, which is what the community wants.“

“Binance To Implement Terra Classic (LUNC) Burn Mechanism

Quick thread on what we’re doing and why below.https://t.co/b86RlCGPmv

– CZ 🔶 Binance (@cz_binance) September 26, 2022

It’s been an eventful few months for the Terra community and its central figures since the first iteration of the Terra blockchain and its UST stablecoin suffered a $40 billion wipeout in May. Terra then became Terra Classic, and Terraform Labs launched a new blockchain called Terra 2.0 with the removal of the collapsed stablecoin UST. Terra 2.0’s LUNA token also saw a double-digit rise today, topping $2.76 after a multi-week decline. The rise in LUNC and LUNA comes hours after it emerged that Terraform Labs CEO Do Kwon had been placed on an Interpol red notice list for his role in Terra’s collapse. The Korean entrepreneur surfaced for the last time on September 17 to tell his Twitter followers that he was “not on the run.” The red notice means he is now a fugitive wanted in 195 countries.

Dear CT – I will tell you what i am doing and where i am if:

1) we are friends
2) we have plans to meet
3) we are involved in a gps based web3 game

Otherwise you have no business knowing my gps coordinates

– Do Kwon 🌕 (@stablekwon) September 17, 2022