Terra Classic Burn: 9.3M LUNC Burnt Since 1.2% Tax Burn Went Live

In just two hours, demand for Terra Classic (LUNC) has dwindled from 19 million to around 9 million.

The LUNC validator StakeBin reports that more than 9 million LUNC tokens had been burned in the short hours since the 1.2% tax plan went live.

The long-awaited update to the LUNC tax parameters finally went live at roughly 6:18 UTC today. The LUNC supply has been set to drop to 10 billion tokens, which is the point at which the tax parameter will begin collecting. Of note, the current supply is somewhere about 6.9 trillion.

If the Terra Classic network is going to make the most of the tax burn, it will need to keep traffic levels high while keeping the LUNC price low. With these parameters in place, the network may still need up to ten years to reach its objective at a burn rate of 1.2 percent.

In a Twitter thread published on Tuesday, LUNC Burn, an unofficial account tracking LUNC burn activity, attempted to provide the community a sense of what might be expected following the parameter adjustment should volumes continue high by using only on-chain volume over the previous two weeks.

 

At 1.2% of last week’s volume, the maximum amount of LUNC that can be burned each week is 14 billion, each month 60 billion, and each year 720 billion.

Conversely, if last week’s amount of 8.33 trillion LUNC is used, then 99.96 billion will be burned every two weeks, 199.92 billion per month, and nearly 2.3 trillion a year.

If production continues at its current clip, it will take at least five years for total supplies of Terra classic to reach the billions.

Once again, the data shows that a higher volume results in a higher caloric expenditure.

It’s important to note that the 1.2% tax burn isn’t the only way the community is thinking of decreasing the LUNC token supply. In a post published earlier this month, Edward Kim, a developer on the Terra Classic Core team, and others propose a radical plan to reestablish the dollar peg of TerraUSD (UST), now known as TerraClasicUSD (USTC) through a community-funded debt restructuring. Particularly useful for context, the original algorithmic controls allowed USTC to burn surplus LUNC tokens at a quicker rate.

Some trading platforms and exchanges have helped the community collect and burn the 1.2% tax from off-chain transactions like spot trading activity in addition to on-chain transactions. When the proposal was first released, MEXC Global burned approximately 466 million LUNC in a two-week event.

 

 

After the event has concluded, many participants are counting on the exchange to keep burning LUNC tokens, as it has indicated that it may do so if given positive community feedback. Meanwhile, yesterday, trading platform eToro announced that it, along with Kucoin and MEXC Global, will be implementing the idea on trading activities.

Additionally, several additional exchanges, like as Binance and kraken, have pledged cooperation, though solely for on-chain transactions (deposits and withdrawals).

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