Changpeng Zhao, the CEO of Binance, has finally decided to have the platform participate in the LUNC token burn following feedback from the community. As such, Binance will now send the transaction fees collected on its LUNC/BUSD and LUNC/USDT trading pairs to the official burn address.
Binance finally decides to listen to its community
On September 23, Changpeng Zhao, the CEO of Binance, said on Twitter that he wanted to implement a burn option on Luna Classic (LUNC) in the form of a 1.2% tax on transactions made on the platform.
Binance is the world’s largest cryptocurrency exchange platform with over 30 million users. If you want to sign up, we have written a tutorial for it.
In order to leave the community in charge of LUNC, Changpeng Zhao had specified that if at least 50% of LUNC traders chose to pay this tax on the platform, then the tax in question would be applied to all trading pairs involving LUNC.
However, in the face of mixed feedback, CZ reversed its decision and eventually decided to send the transaction fees collected on LUNC/BUSD and LUNC/USDT pairs to the address for LUNC token burn:
Instead, we have decided to begin burning all trading fees collected on the LUNC/BUSD and LUNC/USDT spot and margin trading pairs on Binance.
Fees will be converted to LUNC then sent to the burn address. The burn is paid at our expense, not the users’.
– CZ Binance (@cz_binance) September 26, 2022
Instead, we have decided to start burning all trading commissions collected on the spot and margin trading pairs LUNC/BUSD and LUNC/USDT on Binance. The commissions will be converted to LUNC and then sent to the burn address. The burn is paid for by us, not by the users. “
Real impact on the future of Luna Classic
As the world’s largest exchange in terms of number of users but also volume traded, this decision was not without consequences. Firstly, LUNC DAO, the community of validators that is making the news and working for a massive burn of LUNC in order to make it a deflationary token, stressed the importance of this measure:
People don’t realize the significance of what just happened with Binance. It’s probably way better than a straight up 1.2% tax because it preserves volume
If volume remains similar to the last 2 months, Binance will burn XX billion $LUNC per week and possibly ☻1 trillion by EOY
– ℕℂ (@LUNCDAO) September 26, 2022
People don’t realise the importance of what just happened with Binance. It’s probably better than just a 1.2% tax because it preserves volume. If volume stays similar to the last 2 months, Binance will burn XX billion LUNC per week and maybe over 1 trillion by EOY. “
The token price rose dramatically, climbing 80% in five hours following the announcement, before stabilising at around $0.0003 (current price). Over the past 24 hours, the token price has risen 59%.
However, in a coincidence of timing, Bloomberg reported at the same time that Do Kwon, the founder of Terra, had been placed on the Interpol red list. This news prompted a significant number of investors to sell their assets, fearing a mechanical drop in LUNC.
However, Binance’s decision took over the token’s price, causing a wave of liquidations.
LUNC positions liquidated short (red) and long (green)
As LUNC is a particularly volatile asset due to its dependence on news, its future remains uncertain, but the implementation of measures such as Binance’s can only reduce the amount of tokens in circulation. A case to follow
