Despite losing a large portion of its value following the Terra network collapse, LUNA Classic (LUNC), is still getting a lot support from both investors and companies in the space. LUNC’s supply ballooned during this time, reaching trillions of tokens in circulation. As a result, the rise in digital asset prices is being hampered by an increased supply. There are various initiatives to decrease its supply.
There are more than 24 billion LUNC,
The LUNC fire was started a few months back and has now been expanded to include the LUNC-burned transactions from Binance. Binance is the most important crypto exchange worldwide. It has been one of the best avenues to burn LUNC because it includes a 1.2% tax on all LUNC transactions.
Binance’s burn is now about one month in the making and the exchange has already burned billions of LUNC. Binance’s latest burn resulted in 1.3 billion tokens being removed from circulation. One thing is certain, however: the number of LUNC burned on the exchange has decreased over the past 4 weeks.
It is easy to understand why, as the traded tokens represent the trading fees that are being lost and the LUNC volume of trading has fallen. There is still plenty of trading volume. more than 24 billionLUNC has been burned thus far. This translates to over $5.5 million worth of tokens burned at today’s price.
Source : TradingView.com| Source: LUNCUSD on TradingView.com
To slow burn rate
Although there were millions of dollars in tokens that have been burned, they are still small compared with the amount of digital assets available. The Binance burns were expected to bring about large burns but Monday’s burn saw only about $300,000 worth of tokens burned.
The burn tax on LUNC transactions that are on-chain is decreasing from 1.2% down to 0.2%. Exchanges like Binance already have begun to implement the burn. Off-chain transactions remain subject to the burntax. The lower burn tax means there will be an even lower burning rate moving forward. It impacts the digital asset’s price because there are not enough tokens being taken out of circulation.
In addition, daily volumes across all exchanges are on the decline. Coinmarketcap data indicates that the daily volume has dropped by almost 50% over 24 hours. Trading volume that is lower than normal means there are less trading fees. This brings us full circle to the problem of the slow burn rate.
Currently, LUNC trades at $0.00023 as of the writing. It’s the 35th most popular cryptocurrency, having a market cap in excess of $1.5 billion.
Featured Image from MEXC Blog. Chart from TradingView.com
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