Over 9M Terra Classic Burnt By Tax Burn In Few Hours, Here’s How Much LUNC Would Be Burnt Weekly, Monthly & Annually

Terra LUNA Classic (LUNC) supply has been reduced by over 9 million in just two hours.

In just a few hours since the LUNC 1.2% tax proposal went live, over 9 million LUNC tokens have been burned already, according to data from LUNC validator StakeBin.

It bears mentioning that the LUNC tax parameter change went live today at about 6:18 UTC after weeks of anticipation by the community. The tax parameter is programmed to run till the LUNC supply falls to 10 billion tokens. Notably, the current supply sits at about 6.9 trillion.

The Terra Classic network will need to maintain high volumes with a low LUNC price to get the most out of the tax burn. Moreover, even with these conditions in place, it could still take up to a decade for the network to achieve its goal with a burn rate of 1.2%.

In a Twitter thread on Tuesday, using only on-chain volume for the last two weeks, LUNC Burn, an unofficial account tracking LUNC burn activity, tried to give the community a sense of what can be expected following the parameter change should volumes remain high.

Going by last week’s volume of 1.17 trillion and applying the 1.2% burn tax, 14 billion LUNC can be burnt every week, 60 billion every month, and 720 billion yearly.

On the other hand, using the volume of 8.33 trillion LUNC from the week before, 99.96 billion will be burnt every two weeks, 199.92 every month, and over 2.3 trillion every year.

Approximately at these rates, it will take at least five years to take Terra classic total supply to billions.

Again the analysis emphasizes that the higher the volume, the greater the burn.

It bears mentioning that the 1.2% tax burn is not the only plan the community has in mind to bring down the supply of LUNC tokens. In a post released earlier this month co-authored by Terra Classic Core developer Edward Kim, the authors reveal a bold idea to help recover the dollar peg of TerraUSD (UST), now TerraClasicUSD (USTC), through a form of debt restructuring funded by the community. Notably, the original algorithmic controls that helped USTC could burn excess LUNC tokens at a faster rate.

Aside from on-chain transactions, the community has also received support from some trading platforms and exchanges to collect and burn the 1.2% tax from off-chain transactions like spot trading activity. Notably, MEXC Global was the first, running a 2-week burn event before the proposal went live, burning over 466 million LUNC in the process.

While the event is over, several community members hope the exchange will resume burning LUNC tokens as it said it could extend the initiative depending on community feedback. Meanwhile, yesterday, trading platform eToro revealed its plan to implement the proposal on trading activity along with Kucoin, and MEXC Global.

Several other exchanges like Binance, kraken have also pledged support but only for on-chain activity (deposits and withdrawals).

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