The Terra Luna Classic (LUNC)# token is being burned as part of the community strategy to reduce the circulating supply of the currency, aiming to increase its scarcity and support its market value. The burning process (Token Burning) involves permanently removing a certain amount of tokens from circulation, usually by sending them to an inaccessible wallet address (known as a burn address).
Information about LUNC$ burning:
Burning mechanism:
LUNC burning operations began systematically after the collapse of the Terra system in May 2022, when the stablecoin USTC lost its peg to the US dollar, leading to massive inflation in the supply of LUNC.
Platforms like Binance#BinanceAlphaAlert , the largest cryptocurrency trading platform, burn large amounts of LUNC periodically, as they burn a percentage of trading fees on spot and margin LUNC pairs. For example:
In January 2025, Binance burned around 1.7 billion LUNC tokens in batch 29 of the burning mechanism, bringing its total burned to approximately 68.39 billion tokens.
By June 2025, the total LUNC burned by the community exceeded 112 billion tokens.
A transaction tax of 0.2% (reduced from 1.2% after community proposal 5234) is also imposed on LUNC transactions, with these fees being burned to reduce supply.
Impact on supply and price:
The circulating supply of LUNC is very large (approximately 5.5 trillion tokens currently), as a result of the recent update Baxendale, Matthew. (2024, July 1). Luna Classic (LUNC): Everything You Need to Know. Medium. https://medium.com/@matthew-baxendale/luna-classic-lunc-everything-you-need-to-know-7c718f4c5d4f
Burning operations aim to reduce this supply to create a scarcity that may support price increases. However, due to the enormous supply, some believe the impact on price may be limited unless a large percentage (like 99% of the supply) is burned.
Despite burning over 395 billion tokens by January 2025, the price remains low (around $0.0001148 in January 2025), with minor fluctuations.
Community efforts:
The Terra Luna Classic community is very active in supporting burning operations, with validators, platforms, and investors participating in this process.
There are initiatives like "Buy Back and Burn" from companies like Lunanauts, where USTC is bought and amounts of LUNC are burned to support the ecosystem.
Suggestions like security updates and transaction fee reductions are continuously discussed to improve the ecosystem.
Challenges and expectations:
Despite the efforts, LUNC faces significant challenges due to its previous collapse and loss of trust. The current price (around $0.0001) is far from its peak of $119.2 in April 2022.
Future expectations range from cautious optimism (like reaching $0.00076 by 2030) to skepticism due to the massive supply and market volatility.
Factors such as network updates, burning more tokens, and general market improvements may support a potential recovery, but risks remain high.
Notes:
Binance is the largest contributor to LUNC burning, accounting for about 52% of the total tokens burned so far.
Burning operations are ongoing, but the impact on the price has not been significant so far due to the massive circulating supply.
Caution is advised when investing in LUNC$ due to high volatility and market risks.