- The Terra Luna Classic community burned 726 million USTC from Anchor Protocol, raising hopes for a price rally despite low trading volume.
- An increase in the burn tax to 1.5% could further accelerate token burns and support long-term staking rewards.
In a significant move, the Terra Luna Classic (LUNC) community has burned 726 million USTC tokens from the Anchor Protocol. This initiative has reignited hopes for a potential price rally, even amidst relatively low trading volumes. The burn was part of a broader strategy to rejuvenate the Terra Luna Classic ecosystem by reducing the circulating supply of its tokens.
Increased Burn Tax: A Game Changer?
A potential increase in the burn tax to 1.5% is on the horizon, which could further accelerate token burns. This change is expected to bolster long-term staking rewards within the Terra Luna Classic ecosystem. According to a recent update by CNF, Terra Luna Classic has ambitious plans to burn 1 billion USTC and 275 billion LUNC. The community’s latest burn, facilitated by the approval of proposal 12135, represents a significant step towards these goals.
The approval came after a U.S. bankruptcy court permitted Terraform Labs (TFL) to wind down its operations. This legal backing has provided the community with the green light to burn billions of LUNC and USTC tokens across various related projects.
Burn Tax Impact
Increasing the burn tax to 1.5% from the current 0.4% would effectively triple the contribution rates to both the community pool and the oracle pool. This adjustment is anticipated to significantly hasten the pace of LUNC and USTC token burns while boosting funding for the community pool and the oracle pool, which are crucial for sustaining long-term staking rewards.
LUNC and USTC: Price Rally on the Horizon?
Following the recent token burn, there has been a modest uptick in Terra Classic (LUNC) prices. Currently, LUNC is trading at $0.00008524, reflecting a 0.64% increase over the past day and a 3.74% rise over the past week. Despite these positive movements, trading volume remains low due to broader market pressures.
Market Reactions and Community Sentiment
These price movements suggest a cautious optimism within the market, spurred by the ongoing developments in the Terra Luna Classic ecosystem. The burn was executed through a contract migration in Anchor Protocol and narrowly passed with 27.23% of votes in favor. Notably, while only 25% of validators supported the proposal, a significant 92% of delegators voted “Yes,” highlighting the community’s strong backing for the initiative.
Although the developer successfully migrated Anchor Protocol’s contract, an attempt to burn 46 million USTC in Mirror Protocol failed, prompting further investigation. This setback has not dampened the community’s resolve, as efforts to burn tokens and reduce supply continue.
The Terra Luna Classic community’s recent actions have laid the groundwork for potential future price rallies. The increased burn tax, if implemented, could further accelerate these efforts, providing a much-needed boost to the ecosystem.
