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The Binance exchange quickly changed its mind and decided to implement a mechanism to burn Terra Classic (LUNC), a coin that still has fans around the world who believe in its future.
The cryptocurrency has a total of 6,901,371,244,940 units in circulation, making any upward movement in price difficult.
This is because, as there are trillions of LUNCs in existence, it is difficult for the coin to appreciate much, as even if the entire cryptocurrency market bought it, it still would not signify a bullish move.
High-supply cryptocurrencies in circulation, such as Shiba Inu (SHIB), have been implementing burn mechanisms to kill coins and try to push their price up.
Because it only has 21 million, Bitcoin does not suffer from this problem, since its quantity is limited, known and immutable.
Binance decides to burn LUNC, understands how it will be
Binance held an AMA last Friday (23) with its clients and one of the questions put to its CEO, CZ, was how the exchange was planning to burn LUNC.
Terra Classic still has a loyal base of speculative traders, even without strong foundations as a cryptocurrency project. Binance is the top exchange by trading volume in this community, which is desperate to see an improvement in listings.
Therefore, CZ denied that it would burn LUNC with a tax mechanism of 1.2% per transaction, something that it did not believe was fair to client merchants.
However, the broker backed off and stated that it will implement the burn from September 21, 2022, into the indefinite future. In explanation, the broker stated that he will use all the value he earns from fees on client trades and then burn those coins.
“In Response To The LUNC Community’s Proposal On Burning Trading Fees While Maintaining A Good Trading Experience For Users, Binance Will Implement A Burning Mechanism To Burn All Trading Fees On Spot And Margin Trading Pairs. Of LUNC, Sending Them To The Recording Address Of LUNC”.
To give transparency to the case, the broker will disclose the number of LUNC burned weekly, also providing the address of the transaction through the network.
LUNC price skyrockets with novelty
As it was a community wish to see some action from Binance to burn tokens, the LUNC community reacted happily.
Thus, the price of the Terra Classic (LUNC) in dollars soared 40% this Monday (26), with each unit of the currency worth US$0.00031 today.
It should be remembered that the first coin burn that Binance will carry out will be on October 1, when the circulating supply of the coin will go through the first contribution of a centralized exchange.
