- Terra Luna Classic is poised for a significant token burn, potentially reducing over 1 billion USTC and 275 billion LUNC tokens as part of its Chapter 11 bankruptcy proceedings.
- This anticipated burn has already sparked a 10% rebound in the prices of both LUNC and USTC.
In a notable development for the Terra Luna Classic (LUNC) ecosystem, a validator has suggested that the community could soon witness the burning of over 1 billion USTC and 275 billion LUNC tokens. This potential burn is linked to the ongoing Chapter 11 bankruptcy proceedings involving Terraform Labs (TFL) and the U.S. SEC.
Massive Burn in the Works
According to Terra Luna Classic validator HappyCattyCrypto, the community’s expectations are high regarding the burning of these substantial amounts of tokens. This speculation follows recent disclosures about the Terra ecosystem’s financial troubles and the court-ordered measures associated with the Chapter 11 bankruptcy. HappyCattyCrypto’s research indicates that the burn could significantly impact the overall token supply.
The validator also highlighted the need for the community to migrate critical contracts, specifically those associated with the Mirror Protocol and Anchor Protocol, to new code like Risk Harbor. These protocols involve Columbus-5 native assets, USTC and LUNC, which could influence the burn amounts further.
Impending Deadline and Operational Changes
The situation is complicated by the fact that TFL will cease its operations related to Columbus-5 and Phoenix-1 chains after October 31. Post this date, any further token burn or transfer may face significant challenges. The court has mandated that all assets associated with these chains be burned, and TFL will no longer support future chain upgrades following Proposal 4818.
Additionally, data from Terra Finder shows that over 2.58 billion LUNC have been reclaimed from the shuttle bridge recently reopened by TFL. This adds another layer of complexity to the token burn process and its potential impact on the market.
Price Reactions and Market Sentiment
The anticipated burn has sparked positive movement in the market. Terra Luna Classic’s LUNC and USTC tokens have shown a rebound in recent days. LUNC’s price has risen by approximately 5%, trading at $0.00007537, with a trading volume increase of 27% over the past 24 hours. Similarly, USTC has gained 10% in a week, currently trading at $0.01593, despite a recent drop in trading volume.
The slight positive sentiment is further bolstered by Genuine Labs’ announcement of the Tax2Gas upgrade, which is expected to enhance the Terra Luna Classic chain.
As Terra Luna Classic navigates these turbulent waters, the community’s focus remains on the massive token burn and its potential to stabilize and boost token prices. Whether the anticipated burn will meet expectations and how it will influence the broader market remains to be seen.
