Major cryptocurrency exchange Binance recently conducted another large-scale burning of Terra (LUNA)’s ‘Luna Classic’ (LUNC) coins. On August 1st, Binance transferred 1.41 billion LUNC tokens to its burn address, reducing the circulating supply of the coin.
This marks Binance’s 12th batch of LUNC burns from trading fees on its LUNC spot and margin trading pairs. In total, Binance has now burned around 37 billion LUNC tokens through this mechanism. The large-scale burns have helped fuel demand for LUNC, spurring hopes of an increase in the coin’s price in the near future.
The news of Binance’s latest LUNC burn comes amid an overall burn drive within the Terra ecosystem. So far, more than 71.5 billion LUNC tokens have been burned by the Terra community as a whole, passing the 70 billion milestone recently. According to reports,Ozone Protocol is set to burn an additional 800 million U.S Terra (USTC) tokens in the near future.
The LUNC burn mechanism is seen as a way to help stabilize and potentially increase the price of LUNC tokens. By reducing the number of circulating coins, the supply/demand dynamic shifts in favor of rising prices. While LUNC is still down significantly from its all-time high near $0.00012 set back in April 2022, the burns have provided a glimmer of hope for LUNC investors and enthusiasts.
The news of Binance’s recent 1.4 billion LUNC burn helped push the price of the coin up slightly on August 1st. However, LUNC remains mostly range-bound, trading around $0.0000796 at the time of writing according to CoinGape Markets data.
Some technical analysts believe LUNC needs to bounce off the $0.00009 support level and form an upward price channel to see any meaningful recovery.
Going forward, continued burns by Binance and the Terra community will be crucial for LUNC’s price prospects. However, fundamental factors like developer activity and the rollout of new use cases for LUNC will ultimately determine the long-term viability of the project.
The world’s largest exchange playing a role in catalyzing the burn mechanism at least provides a short-term price catalyst for Luna Classic investors eager for some gains after the LUNA/UST de-pegging crisis in May 2022.