Binance has said that it will begin to consume Luna Classic trade fees. LUNC has increased as a result.
According to CoinGecko statistics, Terra Classic’s native token is up 35% today, trading at about $0.0003, driven by Binance’s news that it would begin burning LUNA Classic trade fees. In a blog post published on Monday, the largest cryptocurrency exchange in the world said that it will no longer collect trading fees for the coin’s spot and margin trading pairings.
The notification did not confirm the number of tokens that would be destroyed, but it did state that the blog article will be updated weekly with on-chain statistics displaying the burned tokens.
The so-called “Lunatics” of the Terra Classic community have demanded that Binance and other cryptocurrency exchanges begin destroying LUNC tokens after the network implemented a significant update to its tokenomics last week. In an effort to reduce the total quantity of LUNC tokens from 6.9 trillion to 20 billion, Terra Classic instituted a 1.2% “burn tax” on every transaction on September 20.
In principle, the tax was intended to exert deflationary pressure on the token, but its value has plummeted over the last week despite a reduction in its supply. TerRarity reports that around 1.8 billion LUNC had been burnt in the previous week.
That is comparable to around $540,000 at current pricing, which hardly makes a dent in Terra Classic’s $2 billion market valuation. In addition to today’s uptick, it’s worth noting that LUNC has had a hard month along with the larger crypto market; it’s down about 50% since September 8.
Monday, the CEO of Binance, Changpeng “CZ” Zhao, explained on Twitter why the exchange decided on the burn instead of an earlier intention to offer an opt-in transaction burn. “Fees will be converted to LUNC and sent to the burn address.
The cost of the fire is borne by us, not by the consumers,” he stated. Thus, we are able to be fair to all users. The trading experience and liquidity remain unchanged, and Binance may still contribute to the community-desired decline in LUNC supply.”
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