The native token of Terra Classic (LUNC) reported witnessing a rally on Wednesday. The surge was noted to be the outcome of a 1.2% tax burn implementation on all the on–chain transactions in LUNC. It is evident that the tax proposal intended to reduce the enormous current supply of the token.
Many major cryptocurrency exchanges were seen to support the tax proposal. One such prominent exchange announced a burn mechanism’s implementation over its platform focusing on burning all the trading fees generated after the spot and margin trading pairs of LUNC. The platform is said to send the generated trading fees into the LUNC burn address.
The exchange will do the same for up to continuously for upcoming five weeks and by the end of the month, it will update to start releasing the monthly burn results.
In its last said burn, the crypto exchange announced the result according to which more than 1.26 billion LUNC tokens were burned following the passage of proposal 5234. These proposals resulted in effectively minimizing the tax burn from about 1.2 % to just 0.2%. Including the recent burning tokens to the overall burnt tokens, the exchange has burned more than 13.5 billion LUNC tokens by now.
Although the burnt LUNC tokens might seem massive in number, there is hardly any impact on its trading price. In September 2022, Terra Classi native token witnessed a surge and attained a high of 0.00059 USD. However, it experienced a drop of almost 75% since then. At the press time, LUNC is trading at a bit over 0.00015 USD.
Terra Rebels lead developer, Tobias Andresen during an ‘ask me anything’ sessions with the Terra community members said the 1.2% burning tax might take another century. There would be enough LUNC tokens burnt by the time that might take the token’s price to 1 USD.
One LUNC supporter while quoting founder of Terra network Do Kwon said that there is a possibility that 1.2% tax burn might not work.
Similar feelings about the LUNC burn mechanism are broadly over the social media place as the hype around the tokens burning has decreased drastically.
In May this year, the prominent Terra (LUNA) network witnessed collapse in the wake of its native algorithmic stablecoin UST lost its peg with the USD. This created havoc all around the crypto space and created a ripple effect that resulted in the fall of several other prominent names within the crypto industry, including Three Arrows Capital, crypto lender Celsius network and Voyager, etc.
Source: https://www.thecoinrepublic.com/2022/11/25/lunc-burn-might-struggle-ahead-as-the-hype-is-getting-lower/