Terra Luna Classic$0.00013818.00%
Interestingly, two days later, the CEO of Terraform Labs, Do Won, tweeted that sending the LUNA tokens to LUNAs burned addresses would not improve LUNAs status. To clarify, as noted by Terraform Labs CEO Do Kwon on multiple occasions, I think sending tokens to burn addresses for LUNA is a bad idea — it does not really accomplish anything other than losing the tokens. Terraform Labs CEO Do Kwon has shared a LUNA burn address that will automatically burn any LUNA tokens sent to it, and will actually decrease the supply that is floating around in the market. A LUNA burn address.
In doing so, a responseer asked about burn addresses for LUNA – the mechanism whereby holders of LUNA could actually send their coins to the black hole in order to reduce circulating supply. The suggestion was met with skepticism by members of the cryptocurrency community, who suggested Terra instead burn LUNA in order to reduce circulating supply of LUNA.
Do Kwon proposed that the Terra Luna token be burned, with the limit set to a billion, as part of a plan to revive the Terra ecosystem. In addition to strengthening the Terra network, Do Kwon, the founder of Terraform Labs, suggested moving the Terra Luna token onto a newer, more stable, Tera Network. Perhaps conceding the fundamental issue with the tethering of the Luna with the UST, the CEO of Terraform Labs suggested moving the UST, which was the primary asset of the Terra Blockchain before, out of the Terra ecosystem.
The recent plan for the revival of Terra announced by Do Kwon, the Co-Founder and CEO of Terraform LabsDo Kwon, the Co-Founder and CEO of Terraform Labs, received a mixed response, with many doubting the efficacy of the hardfork to resurrect the falling prices of the terra tokens luanna and terraUSD (UST). Terraform Labs, developers of the terra, UST, and Luna blockchains Terra, UST, has a plan they are hoping can reverse the crash. Instead, the UST is an algorithmic stablecoin, primarily using luna, which is terra blockchains native cryptocurrency, to maintain its peg.
To maintain its $1 pegged value, terra tokens (LUNA) are burned and issued, keeping value stable in spite of usually volatile cryptocurrency markets. With both tokens suffering from a catastrophic collapse, the only conceivable way to get TerraUSD (UST) back to its $1 pegged value is to massively burn through Terra (LUNA) tokens, increasing the value of them, and therefore of their paired stablecoin. After suffering a catastrophic crash earlier this month, Terra (LUNA) has been desperate in their attempts to bring back the Terra (LUNA) tokens to their original values, burning an enormous reported 85% of their tokens.
It is interesting to note that earlier this month, Terra Luna lost 100% after stablecoin TerraUSD lost peg, which caused billions of dollars in investor assets to be destroyed, and brought the stablecoin under regulators control. With the crash in Luna cryptocurrency seeing Lunas floating supply explode to more than 6.5 trillion coins, some holders wanted to see Terra Luna burned in order to reduce this supply and possibly boost its value.
By burning a Luna, holders are hoping that it will increase the scarcity of their coins, pushing back the price back to $1. By burning the Luna, holders hope this will increase the scarcity of their coins, pushing the price back toward $1.
Do Kwon has confirmed before that Terra is no longer mining new LUNAs, one of the major reasons investors think a burning mechanism would increase LUNAs scarcity-driven price. In fact, Do Kwon has now gone on record saying TerraForm Labs does not have the funds or coins to burn through circulating supplies of LUNA.
With some Luna holders calling on Terraform Labs or Luna Foundation Guardians to buy up and burn the Luna supply, customers are already asking where those locations will be getting the money to make that gargantuan consumption. While Terras current rebuilding plans are focused more around the Luna Fork and Luna 2.0, some owners have dismissed that, instead seeing potential within existing chains via a Luna Burn.
Naming it Luna Resurrection, Terraform Labs Pioneer Do Kwons proposal would have seen a different chain replace the one from Luna. The older chain will be known as Terra Classic, and Luna Classic will similarly see Lunas current iteration continue. If a continued vote passes, Moon 2.0 will be released on May 27th — the same date that will serve as a starting block to the new Terra chain. The new chain would be created along with one billion Luna coins, to be distributed to the current holders of Luna and UST, and to finance development of the new Terra applications.
Swapping 1 UST and burning it for LUNA, the governance token, means that LUNA will be mined in greater numbers, thereby dilution in supply, lowering this tokens price. Swapping provides arbitrage opportunities every time 1 UST drops below $1, since speculators can purchase discounted USTs and swap them in exchange for $1 of LUNA, making a small profit. Singapore-based cryptocurrency exchange MEXC Global plans to use fees generated by spot trades of LUNA/USDT to purchase LUNA on the secondary market, which would then be burned. Each LUNA) token sent to a LUNA burning address will be burned instantly, effectively decreasing the circulating supply of LUNA tokens.
