Leading cryptocurrency trading platform Binance has recently burned a substantial 1.4 billion tokens of the Terra Classic ecosystem ($LUNC) during its twelfth burning batch, effectively removing a large number of tokens from circulation.
The cumulative amount of LUNC tokens torched by Binance is now close to the 37 billion mark, while the cryptocurrency’s community has now destroyed over 70 billion tokens in total. Binance’s recent burn came after a similar transaction in July, where Binance transferred 2.65 billion LUNC tokens to a burn address, effectively removing them from circulation. The transaction incurred a fee of 13.25 million LUNC.
Terra Classic’s tokenomics employ a mechanism that automatically sends tokens to a dead address every time a transaction is made. The number of tokens sent to these wallets is proportional to the current circulation, guaranteeing a perpetual dwindling of the total token supply, and hypothetically inflating their value as scarcity increases.
As previously reported, Binance orchestrated a burn of 1.04 billion LUNC tokens in June as the exchange moves to cut the share of LUNC spot and margin trading fees used to burn tokens from 100% to 50% earlier, with the community maintaining its support for the exchange’s token burns.
It’s worth noting that the original Terra ecosystem collapsed last year and later rebranded to Terra Classic, while a new, forked blockchain took the Terra brand with it. When Terra’s ecosystem collapsed, its circulating supply jumped from 340 million tokens to 6.9 trillion, and to combat the inflation $LUNC supporters have added a 1.2% tax burn on all transactions conducted on the network.
The Terra Classic community, has been battling for increased adoption and even created a petition to get listed on cryptocurrency exchange Coinbase. Over the last few months, LUNC token burns have been growing through several community-led projects, including Terra Casino, Cremation Coin, and DFLunc.
Binance has supported LUNC’s network upgrades to date, including one that set seigniorage rewards on the network to 0%. Binance has been supporting the network’s token burns, with for example its third batch of burns destroying 2.5 billion tokens, permanently removing them from circulation in a single transaction.
Earlier, in an effort to re-peg TerraClassicUSD ($USTC) to the dollar, the LUNC community mulled over a proposal that involved a mechanism that includes divergence fees on USTC trades that deviate from the peg.
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