Terra Classic soars as Binance appeases Crypto crazies

Binance introduced the transaction fee burn tax after Terra Classic implemented a 1.2% burn tax on all on-chain transactions.

Months after collapsing to near zero, Luna Classic is soaring.

According to data from CoinGecko the native Terra Classic token is up 35% today at around $0.0003, following an announcement from Binance detailing a plan to start burning LUNA Classic transaction fees. On her blog monday Binance has revealed that it will burn transaction fees on the coin’s spot and margin trading pairs. While the announcement did not confirm how much it would burn, it did indicate that the blog post would be updated weekly with on-chain data showing the tokens burned.

Despite today’s jump, LUNC is down almost 50% since September 8 (Source: CoinGecko)

Binance and other cryptocurrency exchanges have faced calls from so-called “Lunatics” from the Terra Classic community to start burning LUNC tokens after the blockchain introduced a major change to its tokenomics last week. On September 20, Terra Classic set up a “combustion tax” by 1.2% on each transaction, with the aim of reducing the total supply of the LUNC token from 6.9 trillion to 20 billion. In theory, the tax was meant to add deflationary pressure to the token, but it has seen a steep decline over the past week, even as its supply has dwindled. According to data from TerRarity, approximately 1.8 billion LUNCs were burned in the past week. That’s the equivalent of around $540,000 at today’s prices, which is barely enough to dent Terra Classic’s $2 billion market capitalization. It’s also worth noting that LUNC had a tough month, as did the crypto market as a whole, outside of today’s bull run; it has fallen nearly 50% since September 8.

CZ’s Comments on Burn

Changpeng “CZ” Zhao, CEO of Binance commented on the burn on Twitter on Monday, explaining why the firm opted for the burn over a previous plan to launch an opt-in transaction burn. “Charges will be converted to LUNC and then sent to the burn address. The burn is paid for at our expense, not at the user’s expense“, he wrote. “This way we can be fair to all users. The trading experience and liquidity remain the same, and Binance can still help reduce the supply of LUNC, which the community wants.

The past few months have been turbulent for the Terra community and its central figures since the first iteration of the Terra blockchain and its stablecoin UST suffered a $40 billion wipeout in May. Terra then became Terra Classic, and Terraform Labs launched a new blockchain called Terra 2.0 with the removal of the collapsed UST stablecoin. Terra 2.0’s LUNA token also saw a double-digit rise today, surging above $2.76 after a multi-week decline. The rise in LUNC and LUNA comes hours after it emerged that Terraform Labs CEO Do Kwon had been placed on Interpol’s red notice list for his role in Terra’s collapse. The Korean entrepreneur last surfaced on September 17 to tell his Twitter followers that he was “not on the run.” The red notice means he is now a wanted fugitive in 195 countries.

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Terra Classic soars as Binance appeases Crypto crazies

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