Binance has announced the successful completion of its first-ever token burn on LUNC, raising the prospects of the Terra-based cryptocurrency pulling a parabolic run.
“Binance completes the first $LUNC burn, burning all trading fees collected from LUNC spot and margin trading pairs,” Binance Tweeted on Monday.
The burn saw roughly 5.5B LUNC valued at approximately $1.8 Million taken out of the circulating supply by the Exchange, according to a tweet by Binance CEO CZ. Accordingly, the burnt fees came from trades conducted between September 21, 2022, and October 1, 2022.
LUNC is the native token of the Terra Classic Blockchain. Following the Terra implosion in May, the token crashed into hyperinflation by over 100%. Despite most users exiting the ecosystem, some members stayed and have been attempting to revive the network by introducing schemes that seek to reduce the token’s bloated supply.
Earlier last month, the Terra community approved two proposals which would introduce a 1.2% tax burn for onchain transactions of LUNC and USTC on the Terra Classic Network. In response to the proposals, Binance pledged to support the LUNC community by implementing a burn mechanism “to burn all trading fees on LUNC spot and margin trading pairs by sending them to the LUNC burn address.”
In a separate thread of tweets, Binance CEO CZ stated that the exchange would convert trading fees into LUNC before sending them to the burn address, adding that the exchange would cater for expenses during the burn.
According to data from LUNC Burner, approximately 0.2% of the total supply of LUNC has been burnt, with Binance accounting for about 0.08%. While these figures are underwhelming, considering there are more than 6.8 trillion tokens in circulation, the burn rate is expected to increase as more exchanges support LUNC’s deflation.
Nevertheless, given that “token burning” has a positive impact on price theoretically, investors have been buying LUNC in large batches, pushing up the cryptocurrency’s price and volume considerably.
In September, the cryptocurrency rose by over 300% outpacing most cryptocurrencies following the community’s burn proposal. LUNC has grown by over 200% in the past two months, with the price surging as high as $0.0003695 over the weekend.
However, LUNC is still a long distance from recapturing its all-time high of $119.18, an issue that a more aggressive burn policy could resolve. The token was trading at $0.0003101 after an 8.54% drop in the past 24 hours.