The new Terra Luna network might have launched – but coin burns of Luna Classic (LUNC) and TerraClassicUSD (USTC) have both risen in recent days.
LUNC is currently down 10% in price today to $0.0001094 meanwhile USTC is down 21% to $0.01905. Both of these prices are far below where they were at the beginning of May – when the former Luna token was worth over $80 and the former UST stablecoin pegged to the US dollar.
The new Luna token might have a bigger market cap currently than both tokens, but there is still a lot of movement in the Terra Classic camp.
The proposal to remove 1.1 billion USTC tokens from communal pools and burn them was approved on May 27.
At that time the circulating supply of USTC was 11,279,951,459. As of June 1, the circulating supply of USTC is 10,252,570,040 after the Terra governance portal put the burn proposal into motion.
The move was intended to help restore USTC to its $1 peg.
The creator of the Terra network, Do Kwon, published a burning wallet for the former Luna token back on May 21.
To date more than 655 million LUNC tokens have been removed from supply – at current prices, this equals a cost of $72,000. Individual transactions to burn LUNC have also jumped over 140% in recent days following the launch of the new Terra Luna cryptocurrency.
According to bitquery there are 64 individual transactions to burn LUNC on May 31, up from just 27 on May 29.
Will EverGrow Coin-style transaction tax be implemented?
Many analysts have informally proposed a transaction tax on LUNC to help burn more tokens and boost the overall price.
EverGrow Coin is seen as a great model, with 2% of its transaction tax used to strategically buy back & burn EGC tokens from the market. Today EverGrow Coin has burned nearly 53% of its initial supply – EverGrow Coin only launched in September last year.
The benefit of a transaction tax for coin burning is that no one investor needs to destroy their own tokens for the greater good. Instead, all buy or sell orders contribute to coin burning. It’s estimated that with just a 3% transaction tax on LUNC with a daily volume close to $2 million the current 6.5 trillion LUNC supply could be reduced to pre-attack 350 million tokens within a month.
The MEXC crypto exchange has already implemented a coin-burning tax on LUNC transactions on its platform. To date, more than 150 million LUNC tokens have been burned by this month-long mechanism.
EverGrow Coin provides a fantastic blueprint, while also being a stand-out project in its own right. Many investors have purchased EverGrow Coin in the wake of the crypto crash as promising crypto housed in the secure Binance ecosystem, and with mechanisms in place to avoid a Terra Luna style collapse.