The burn mechanism has been the common strategy adopted by cryptocurrencies to reduce the risk of inflation and to promote long-term investment.
Terra Luna Classic (LUNC) has used the burn mechanism as a strategy to its advantage. It automatically burns tokens whenever a transaction takes place on the network.
Binance, the world’s largest cryptocurrency exchange, has agreed to burn out the majority of the LUNC tokens. It has burned 2.65 billion Terra Classic (LUNC) in its 11th burn round and plans to continue the burn until 50% of the LUNC supply has been reduced. As per reports, the total number of tokens burned has been over 35.5 billion which has increased the price of Terra Classic (LUNC) by 3%. The investors have expressed positive feedback towards this strategy.
Terra Luna Classic (LUNC) has been in the news for adopting positive development strategies since the beginning of May. From Prism announcing its plan to establish an Alliance with LUNA upon chain debut to the burn mechanism that has put the Terra Classic into the spotlight.
The Terra community has been waiting for this burn mechanism to the price surge of LUNC tokens has been really low in the past couple of months. This burn strategy was adopted as Binance aims to reduce the supply of LUNC in the market according to the Proposal 10983 and Proposal 11111. Binance will burn out 50% of LUNC instead of 100% as initially planned and margin out the fee accordingly. Right now, the process of reminting has been stopped because of the proposal that prevents reminting from the 0.2% burn rate.
According to reports, the proposal was approved with the aim of maximizing the reward policy rate by 0.5. This burn is expected to increase the community pool rate by 400%, as predicted by many experts. As of today, 2.65 billion has been transferred to the burn address with the transaction fee being 13.25 billion.
Binance conducted the burn at the beginning of June and has burned 1.04 billion LUNC tokens so far. The burn rate has improved in the past 2 months and the investors have expressed immense gratitude towards the cryptocurrency exchange and the CEO Changpeng Zhao of the exchange for their support.
This strategy was initiated due to the projects like DFLunc, Terra Casino and Cremation Coin, which burn millions of LUNC tokens weekly. This initiative has proven to be successful as 68 billion LUNC tokens have been burned so far which directly impacts the market value of LUNC tokens.
However, even with the burn strategy in place, the price of LUNC tokens is still struggling. In the month of June, the price of LUNC failed to surpass the $0.0001 mark. According to CoinMarketCap, the 3% price jump has proved to be a successful strategy that was adopted by the co-owner of LUNC tokens.
According to expert analysis, the price of LUNC tokens is predicted to be highest by September 2023 with the price being 15.21 dollars by then.
The burning mechanism is the best strategy that can be adopted to maximize the value of the token and also reduce the risk of inflation. The burn strategy that was adopted by Terra Classic LUNC tokens has proved to be successful. However, The Terra Classic cryptocurrency needs to adopt many more development strategies in order to compete in the market today.
The prediction of many experts provides a bearish market for the LUNC tokens but it would be a good idea to keep improvising on similar burn strategies.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
