As the LUNC community grew impatient, Binance has just formalized its participation in the burn of the Terra Classic token. In parallel, Kucoin and Gate.io have also formalized the implementation of the tax burn on their platform
Binance partially responds to burn
Binance was the most anticipated exchange by the LUNC community, given the token’s spot trading volumes exceed 1 billion a day, and accounts for nearly 50% of LUNC trading according to CoinMarketCap.
However, Terra Classic investors and holders, over-motivated by the latest LUNC price increases, may find it difficult to digest Binance’s press release. Indeed, according to the exchange press release, the implementation of the tax burn of 1.2% will be put in place … but only on Binance LUNC deposits and Binance LUNC withdrawals.
In addition to LUNC, the former stablecoin USTC will also be taxed at 1.2% under the same conditions as the Terra Classic token.
The response was even swift from some validators, with annoyance and disillusionment with the decision made by Changpeng Zhao and Binance. The annoyance is just beginning on Twitter.
The reason for this is simple. The volumes related to the trading of the Terra Classic token having been constantly increasing in recent days, several billion dollars are traded daily. Over the past 24 hours, LUNC has even exceeded $3 billion in volume, a considerable sum that places the token only behind Bitcoin, Ethereum and the three main stablecoins on the market: USDT, USDC and BUSD.
Thus, with the on-chain application that Binance makes, these billions of dollars of transactions will not be taken into account as part of the tax burn implementation on the Terra Classic blockchain, and token burn will therefore be slower than expected.
MEXC, Kucoin and Gate.io also in the game
While the crypto exchange MEXC has already implemented the burn tax within its platform and the results are already conclusive, other exchanges have also joined the movement.
The potential for burn is also very interesting, since the crypto exchange MEXC has over the first 4 days of implementation of the 1.2% burn tax burned more than 100 million LUNC tokens, including more than 70 million on the only day of September 7, the best performing for the moment. Tracked by Twitter accounts monitoring burn activity, the estimated amount of this shipment was $25,100.
While according to CoinMarketCap, the crypto exchange MEXC is responsible for only 1% of LUNC’s trading volume, the performance is interesting and suggests room for improvement if this burn tax extends to other platforms with a bigger LUNC exchange volume.
Kucoin and Gate.io, precisely, have successively announced a participation in this tax burn, but not in the same way.
Kucoin has formalized its participation for when the latest version of the proposal related to tax burn will be approved and implemented on the Terra Classic mainnet. Once these conditions are met, LUNC will be burned with each transaction on chain and off chain related to Kucoin.
Gate.io on the contrary suffered the wrath of the LUNC community on Twitter, in particular because its acceptance presents certain conditions. By evoking the difficulties of the application off chain of the burn proposal, the crypto exchange only wants to tax LUNC deposits and withdrawals on Gate.io, similar to what Binance has just accepted. Between Gate.io and Binance, more than 55% of LUNC exchanges are carried out off-chain, and which will therefore unfortunately not be taxed, at least for the moment.
The LUNC community knowing how to be persuasive, it will probably try to change the decisions of the two exchanges. Between Kucoin, MEXC, Gate.io and Binance, the trading volume of the LUNC token is +66%. The challenge for the community therefore seems crucial, and it is essential that Gate.io and especially Binance apply the tax burn under the same conditions as MEXC.
Following Binance’s announcement, the Terra classic token dropped heavily from a price of $0.00059 to $0.00049 within minutes. However, the rise of the token remains considerable over the past few days, with LUNC’s market cap having exceeded $3 billion, placing the token at the gates of the top 20 by market capitalization according to CoinMarketCap.
The Terra Classic is now 24th, and is fast approaching the main altcoins: Polkadot, Avalanche, Matic or Litecoin. The hype for the token is still going strong at the moment.
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