- Binance has burnt LUNC worth around $1.8 million collected from the spot and margin trading.
- As a result of this and other developments, the altcoin continues to outperform other tokens such as Ethereum.
Binance, the largest crypto exchange in the world by traded volume has announced the completion of its first LUNC token burn days after promising to help reduce the token supply.
The burn saw about $1.8 million worth of LUNC collected from spot and margin trading destroyed, based on a tweet from Binance CEO Changpeng Zhao (CZ). “Token burning” means sending a cryptocurrency to a specific address whose keys are unknown. Those tokens are considered destroyed since nobody can access them. Notably, this activity reduces the token circulating supply which is theoretically good for the price.
In late September, Binance stated that it would implement the burn mechanism “in response to the LUNC community proposal on burning trading fees” while maintaining a good trading experience for users. At the time, CZ clarified that trading fees would only be collected on the LUNC/BUSD and LUNC/USDT spot and margin trading pairs.
“Fees will be converted to LUNC and then sent to the burn address. The burn is paid at our expense, not the users.” CZ said. According to him, this would ensure fairness to all users and ensure that the trading experience and liquidity of LUNC remain the same.
According to the LUNC Burner website, however, only 0.2 percent of the token’s total supply has been burned since launch. Accordingly, Binance has only managed to burn about 0.08 percent of LUNA’s supply, figures that some think are underwhelming and unlikely to positively impact price.
The @binance burn the $LUNC community was waiting for just happened.
One week’s worth of fees collected by Binance burned.The value? A meager $1.8m, 0.09% of market cap.https://t.co/azUst9kMj5
— Tree of Alpha (@Tree_of_Alpha) October 3, 2022
Nevertheless, buyers continue to throng towards LUNC with its price surging by over 300 percent in September thanks to the activation of staking in August. LUNC remains to be one of the most profitable tokens to stake today with a 37.8 percent annualized reward. To date, 8.5 percent of circulating tokens have now been staked as per data from Staking Rewards. Last week, the token’s traded volume on Binance also surpassed that of Ethereum in the past week to come second after Bitcoin.
Luna Classic (LUNC) is the native token of the Terra Classic Blockchain which blew up in May after the project’s algorithmic stablecoin lost its peg to the dollar. With the token’s price plummeting to almost zero, the project’s founder, Korean-born Do Kwon, and some community members initiated a recovery plan that included introducing a burn mechanism to reduce the token’s bloated supply.
Despite slumping in early September, the value of LUNC has surged by over 74 percent in the past week and is still up over 60 percent in the past month. All the same, LUNC’s price is still a far cry from its all-time high price of $100 with the increasing scrutiny on the Terra ecosystems weighing down on the prospects of a full recovery. Recently, the token was trading at $0.0002998 after a 6.99 percent drop in the past 24 hours.
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