Binance after the first week of burning LUNC fees

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2022-10-05 21:40:46

Cryptocurrency exchange Binance fulfilled its commitment to burn all Terra Classic (LUNC) fees, but did not bring the expected results.

As reported, last week, the Binance exchange reversed the statement of the CZ CEO and announced the burning of all Terra Classic (LUNC) trading fees. While, inherently this will be the profit that the platform earns.

This decision is considered a “smart” move by Binance to appease the LUNC community, users of the exchange and large institutions trading on Binance.

Binance LUNC Fee Burning Completed Announcement

Tweet: https://twitter.com/binance/status/1576943349143310336

In September, the Terra Classic community approved a proposal to burn 1.2% of the value of each LUNC transaction to reduce the supply of more than 6.7 trillion LUNCs created and the consequences of the collapse of the LUNA – UST model. Simply put, this can be called the “LUNC burning tax”. The Terra Classic investor then asked exchanges, including Binance, to apply this change to their exchanges.

However, the CZ team is in a difficult position, that if it applies such a tax to the application, both Binance users and institutions will suffer property damage as the transaction value is gradually eroded; resulting in both users and trading volume flowing to other platforms without burning LUNC. Accordingly, this is not beneficial to Binance’s business. CZ then proposed another solution, requiring support from users with the LUNC burning tax to apply on a broader scale.

This option received mixed reactions from the LUNC community, who called Mr. Zhao a “broken promise” because he had previously stated that he would support the LUNC burning tax, Binance eventually gave in. Instead of burning users’ LUNCs, the world’s largest cryptocurrency exchange will burn the trading fees they receive from LUNC spot and margin pairs. Coin burn data will be published every Monday.

By the evening of October 3, Binance announced the results of the first LUNC burn. In the last 7 days, the amount of fees that the exchange received from LUNC trading activities was 1.8 million USD, accounting for 0.08% of the total supply. This number is many times lower than the impact many in the LUNC community had expected to be able to reap, as well as showing that LUNC trading activity on Binance has not exploded as expected.

It is estimated that with the current rate of Binance coin burning, it will take up to 15 years for Terra Classic to complete its goal of bringing the total supply of LUNC from 6,700 billion LUNC to only 10 billion.

The LUNC price also somewhat reacted negatively to the disappointing burn results from Binance, dropping nearly 7% in the last 24 hours. However, this price is still higher than the low of last Monday (September 26), the time when LUNC “set up a column” when Binance confirmed it would burn transaction fees to appease the community.

LUNC/USDT price chart at 10:30 a.m. October 4, 2022 (Source: Binance)
LUNC/USDT price chart at 10:30 am 4/10/2022
(Source: Binance)



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