Changpeng Zhao, the CEO of Binance, has finally decided to have the platform participate in the LUNC token burn following feedback from the community. Thus, 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, Binance CEO Changpeng Zhao had said on Twitter that he wanted to implement a burn option on Luna Classic (LUNC) in the form of a 1.2% fee on trades made on the platform.
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In order to leave the community in charge of LUNC, Changpeng Zhao had clarified that if at least 50% of LUNC traders chose to pay this tax on the platform, then the said tax would be applied to all trading pairs featuring 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 start burning all trading commissions collected on the LUNC/BUSD and LUNC/USDT spot and margin trading pairs on Binance. The commissions will be converted to LUNC and then sent to the burn address. The burn is paid at our expense, not the users.”
Real impact on the future of Luna Classic?
As Binance is the largest exchange in the world in terms of number of users but also in terms of volume traded, this decision has not been without consequences. First of all, 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, has stressed the importance of this measure:
“People don’t realize 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 be burning XX billion LUNC per week and maybe over 1 trillion by EOY.”
The price of the token has seen a considerable rise, with the token climbing 80% in 5 hours following the announcement, before stabilizing around the $0.0003 (current price). In the last 24 hours, the token price has risen 59%.
However, by chance 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.
As LUNC is a particularly volatile asset due to its dependence on news, its future remains uncertain, but implementing measures like Binance’s can only reduce the amount of tokens in circulation.