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After the Terra blockchain collapsed back in May of this year, it took down most of its tokens with it. Other projects have fled the blockchain, seeking out a new home, but Luna and Luna Classic, its native cryptocurrencies, remained and saw massive price crashes. The incident had severe consequences, presumably strengthening the bear market and sending prices throughout the industry down even further, but it also prompted lawmakers to consider banning algorithmic stablecoins.
Now, Binance decided to cut the token’s supply in a major burning event taking place today, October 3rd, and while the details, such as the exact amount burned, are still unknown, the price of Luna Classic skyrocketed by more than 70% for this week, and by over 44% this month.
When it comes to specific figures, the situation looks significantly less impressive. Luna Classic’s price managed to hit $0.000365 around mid-Sunday, but the price is nowhere near the $100 where it sat back in April of this year.
Even so, the amount of trading activity that the project has seen over the last several ways has been strong enough to launch LUNC into the top ten coins by trading volume, with a market cap of more than $2.1 billion. With these figures, the token is now more or less equal to Bitcoin Cash, sitting at the edge of the top 30 largest cryptos by market cap.
Why did Binance decide to burn the tokens?
Binance’s idea to burn the tokens was announced on September 26th, when the exchange statd that it would implement a burn mechanism to burn all trading fees on LUNC spot and margin trading pairs. They will be sent to the LUNC burn address, from where it can never be recovered.
https://twitter.com/binance/status/157433226177190
The exchange’s CEO, Changpeng Zhao, noted at the time that there have been numerous discussions on how Binance can help improve the situation surrounding LUNC for the token’s users. The community’s original request was to tax transaction burns, while Zhao’s own idea was to implement an opt-in button. However, he noted that this has changed for three reasons — the community did not like the idea, it would take a while to implement it, and it most likely would not work, as the traders would not vote for it.
Instead, the exchange opted to start burning all trading fees collected on the LUNC/BUSD and LUNC/USDT spot and margin trading pairs on the exchange. It also decided to be the one to pay for the burn, and not burden the community with it.
So far, the exchange has not yet shared how many tokens were burned, although this information should be released as well, shortly.
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