That is in the stock market. They do the reverse split and then sell new shares into the market. That would be like us doing the reverse split just to mint coins back to 6.8T. That is not the case.
The price of the stock is dropping after the reverse split and drops even further when shares are diluted. Yes, we would not be minting but you will see the same result after the reverse split. The price will drop, and people will lose most of their money. As I said l, maybe it will come back up to reverse split price. But it will take quite a bit of time because most people will bail. The price may go back up with new investors coming in.
How is reverse split different from burning?
I mean does burning create value? Isnât it the same process?
But how the results of current burning mechanism is different from reverse split?
@marcelo
I note you left out the mentions of how this can fully resource the blockchain, that would turbo charge the development and bring utility to the chain or how this would enable repeg and swaps, and fund the devs to hire additional talent etc.
The functionality and the accessibility to obtain/trade Lunc would not remain the same.
Once the devs are fully resourced they can hire additional talent to add more functionality and accessibility to the LUNC blockchain.
Did you not read that ?
@jm_1919
Here in Australia we call it Consolidation. I have been investing in the markets for over 25 years and I have seen Consolidations / Reverese Splits work and I have seen a lot that dont work.
I fully understand corporate structures and the various finance mechanisms used for debt and equity markets. In this instance the Consolidation / Reverse Split is the best path to initiate future strengthening of the blockchain.
The reason the ones that dont work, is that there is typically external parties, usually the larger financiers who dont care about shareholders and only themselves. This occurs because Directors and Boards leave the entity vulnerable to bring on financing when they are desperate.
Others I have experienced have been successful and done to attract the Institutional Placements and Financing that have been the correct partners to their business.
Got to do your research on your investment companies and understand what the real purpose is and why they are using that corporate mechanism. (beware the corporate waffle)
There is nothing at all stopping people from selling down or selling out, which is where this is headed anyways when people see what risks are being undertaken in other proposals.
This strategy eliminates a massive amount of risk and ensures our devs are compensated and able to hire additional talent to ensure the future security of the blockchain and onboard more utilities. Just dont see why anyone would want to sell down and out with a clear path to prosperity, when currently their isnt one.
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I think the community has made it pretty clear they donât support a Reverse Split. No matter your explanation of how it can help, which maybe it could, itâs perceived as negative and short and long term price could be severely impacted. Many have said before people will jump ship and never come back due to lost confidence. This is not a good idea. Utility, and eventual Re-Peg are the ways. There are so many other projects willing to burn and so many more things we can do before doing something so drastic.
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Community is in for Reverse Split.
Since burning have failed and volume plummeted.
Even with repeg 6.8T market cap is unjustified.
Only logical way is Reverse Split
10,000 to 1 would leave 680,000,000 coins. Thats a 99.99% consolidation. Leaving more room to grow that a 10 to 1
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@Jimmy1 A reverse split and the current burn mechanism are totally different things.
A reverse split is simply a redenomination of the face value of a stock/coin. Currently, Lunc is at around $0,0002. With a 10-to-1 reverse split, the price of Lunc will be redenominated to $0,002 and everything else will adjust accordingly.
With the current burn mechanism, Lunc literally disappears, so, essentially, the dollar amount of the Lunc burned gets redistributed to everyone else holding Lunc.
To illustrate the difference, an example with simplified numbers:
Imagine a coin X:
- supply = 100 coins
- market cap = $100.
Since 100 coins are worth $100, X = $1 per coin.
Now, imagine a whale with 90 coins, and imagine that you have 10 coins.
With a 10-to-1 reverse split:
- Supply: 10 coins (move the comma to the left: from 100,0 to 10,0)
- Market cap: $100 (no value has been created, so this doesnât change)
Now X = $10 and everything else adjusts accordingly, so the whale has 9 coins and you have 1 coin. The supply is now 10 coins and the market cap is still $100. Before the reverse split, you had $1 worth of X. After it, You still have $1.
Now, with the current burn mechanism: say the whale decided to burn his 90 coins (for whatever reason):
- Supply: 10 coins (the whale burned 90 coins, so only 10 remain)
- Market cap = $100 (no value has been created, so this doesnât change)
Now, comparing a reverse split to a burn mechanism:
- The supply went from 100 to 10
- The market cap is still the same (no value has been created)
The market conditions appear to be the same, but look at the redistribution of wealth:
- With a reverse split, the whale has 9 coins, worth $90 and you have 1 coin worth $10. This is exactly the same situation as before the reverse split.
- With the burn mechanism, the whale now has zero, but you have 1 coin worth $100. You went from $10 to $100.
And this is the difference between a reverse split and the current burn mechanism: with a reverse split, nothing changes except the comma going to the left. With the burn mechanism, wealth gets redistributed.
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Absolutely true
Just correcting the numbers in my example (as it is not possible to edit my previous commentâŚ)
@Jimmy1 A reverse split and the current burn mechanism are totally different things.
A reverse split is simply a redenomination of the face value of a stock/coin. Currently, Lunc is at around $0,0002. With a 10-to-1 reverse split, the price of Lunc will be redenominated to $0,002 and everything else will adjust accordingly.
With the current burn mechanism, Lunc literally disappears, so, essentially, the dollar amount of the Lunc burned gets redistributed to everyone else holding Lunc.
To illustrate the difference, an example with simplified numbers:
Imagine a coin X:
- supply = 100 coins
- market cap = $100.
Since 100 coins are worth $100, X = $1 per coin.
Now, imagine a whale with 90 coins, and imagine that you have 10 coins.
With a 10-to-1 reverse split:
- New Supply: 10 coins (move the comma to the left: from 100,0 to 10,0)
- Market cap: $100 (no value has been created, so this doesnât change)
Now X = $10 and everything else adjusts accordingly, so the whale now has 9 coins and you have 1 coin. The supply is now 10 coins and the market cap is still $100. Before the reverse split, you had $10 worth of X. After it, You still have $10.
Now, with the current burn mechanism: say the whale decided to burn his 90 coins (for whatever reason):
- New Supply: 10 coins (the whale just burned 90 coins, so only 10 remain)
- Market cap = $100 (no value has been created, so this doesnât change)
Now, comparing a reverse split to a burn mechanism:
- The supply went from 100 to 10
- The market cap is still the same (no value has been created)
The market conditions appear to be the same, but look at the redistribution of wealth:
- With a reverse split, the whale has 9 coins, worth $90 and you have 1 coin worth $10. This is exactly the same situation as before the reverse split (in $).
- With the burn mechanism, the whale now has zero coins, but you still have your 10 coins, worth $100. You went from $10 to $100.
And this is the difference between a reverse split and the current burn mechanism: with a reverse split, nothing changes except the comma going to the left. With the burn mechanism, wealth gets redistributed.
Community is ignorant and needs awareness and education and IT HAS NOT been widely discussed to gauge reactions.
Not seen a reasonable discussion against it who is armed with the bigger picture.
Plenty of poorly expressed views without foundation or substance and not seeing the bigger picture.
The Smeagol effect is a big hurdle and the you tube clickbait promoting $40 turning into $10M plus is disingenuous and unhelpful.
Important to highlight that to be eligible to VOTE you have to be staking your LUNC.
Words are cheap.
The repeg and utility is required moving forward and the Consolidation proposal and being able to fully resource the blockchain gets them wheels moving much faster.
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IMO as discussed today in the Twitter Live Space - Lunc the after hours
90% would be 690 Billion supply
99% would be 69 Billion supply
99.9% would be 6.9 Billion supply
99.99% would be 690 Million supply
I believe we need to be mindful that the Smeagols will still need to keep alive their hopes and dreams, of parking their coins and materialising in years ahead with greater value from burned off supply.
Keeping various burn mechanisms functioning and swaps etc will need to be in place and drive down supply and maintain as the devs strengthening and enhancing the security of the blockchain.
Open to it being a community vote with a selection of preference voting when or if the time comes : ))
You mentioned in your proposal that
âLUNC Total Supply needs to be greatly reduced.â
Since reverse split will not change the MC, can you please elaborate/educate more how Lunc supply reduced by âreverse splitâ mechanism will create âvalueâ and âturbo chargeâ the development .
Thanks
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the absurd power of validators and people follow the words of developers and influencers without even knowing if what they are approving will be good
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Please read this part of this thread
Another link in the thread
1 Lunc for 10 held CONSOLIDATION - Burn 90% INSTANTLY - Governance & Proposals - Terra Research Forum
This 1 is more detailed
1 Lunc for 10 held CONSOLIDATION - Burn 90% INSTANTLY - Governance & Proposals - Terra Research Forum
@DadRulesOK Sorry, but I simply donât get how this helps the chain. At best, a reverse split is a neutral move.
And technically speaking, there is no reduction in total supply. A definition from Binance:
Total supply refers to the number of coins or tokens that currently exists and are either in circulation or locked somehow. It is the sum of coins that were already mined (or issued) minus the total of coins that were burned or destroyed.
It is clear that there will be no minting of Lunc. Now, about burning: a definition from Investopedia:
Cryptocurrency burning is the process in which users can remove tokens (also called coins) from circulation, which reduces the number of coins in use. The tokens are sent to a wallet address that cannot be used for transactions other than receiving the coins. The wallet is outside the network, and the tokens can no longer be used.
With a reverse split, no one is moving coins to a receiving-only address, so nothing is being burned.
Therefore, since there is no minting or burning of coins with a reverse split, there will be no reduction in total supply. Like I said before, it is just a redenomination of the face value of Lunc.
So my question is: how a reverse split can fully resource the Lunc blockchain? The devs will not have any more access to funds as they have now. As an example, the community pool has 530M Lunc. At $0,0002 per Lunc, this totals roughly $100,000. After the reverse split, the community pool still has $100,000 available to fund the devs.
Like I already said:
Now, If your main argument is the psychological effect that a number with fewer zeros has in the investment decision of regular people, letâs discuss that.
But saying that a reverse split can bring all this benefits is wishful thinking. If that were the case, a reverse split would be a common practice in the crypto space.
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What about buyback concept combine with consolidation.
Thank You @marcelo. Thatâs exacatly what I was writing from very beginning. Reverse split is just pulling the wool over eyes. Ordinary investors may not notice, that this fake price increase is due RS. I saw several penny stocks that after RS was still loosing itâs value and atm they are not noted at market anymore.