In Brief
- Binance burns $1.7 billion worth of LUNC.
- Most crypto traders were underwhelmed by this number.
- The next burn date is Monday, Oct. 10, 2022.
Binance announced its first weekly burn of Luna Classic (LUNC) spot and margin trading pair fees totaling $1.7 million.
This batch of fees came from trades between Sep. 21, 2022, and Oct. 1, 2022, according to a recent announcement by the exchange. Binance converted fees denominated in cryptocurrencies other than LUNC to LUNC before the burn. The trading platform calculates the fees to be burned each Monday at 00:00:00 UTC.
Fees are “burned” by sending LUNC to a Luna Classic “burn wallet,” making the funds inaccessible to users and reducing the coin’s circulating supply. The transaction ID for the burn is: F6B1CB656843438013D3C9A5948A1353AA3C65F6AE30D627AF791EEE0311AA36.
Binance introduced the burn mechanism to improve the trading experience after a proposal from the LUNC community. According to Binance, all LUNC burns will not affect LUNC spot and margin trading fees. The exchange caps trading fee rates at 0.1%.
Following the collapse of the TerraUSD stablecoin and its sister coin, LUNA, in May 2022, Terraform Labs co-founder Do Kwon announced a recovery plan to fork the original Terra blockchain to create “Terra 2.0.” This fork would see the original LUNA coin remain on the original blockchain as Luna Classic (LUNC). Soon after this, Binance listed LUNAC on May 31, 2022.
Before its collapse, LUNAC had reached an all-time high of $119.18.
LUNC traders respond mostly negatively to burn numbers
In the last 24 hours, the price of LUNC surged 59.4% to $0.00031654 as traders awaited burn numbers, in a classic scenario of “buy the rumor, sell the news.”
Following the release of the burn numbers, trader responses were mixed. One trader, Tree_of_Alpha, pointed out that the amount of LUNC burned was just 0.09% of the coin’s market capitalization: Another trader, kcryptojunkie, advised traders to sell the coin, tweeting, “Dump dump.
In response to a tweet by the LUNC community, MikeHerzig5, lauded Binance and its CEO Changpeng “CZ” Zhao for taking the initiative and called on other exchanges to follow suit: Binance will burn all transaction fees for LUNAC spot and margin trades between Oct. 2, 2022, and Oct. 8, 2022, on Monday, Oct. 10, 2022.
LUNC founder on the run
While those shorting LUNC hope the coin will go to zero, co-founder Kwon is a wanted man. At press time, Kwon is on Interpol’s red notice list after falling afoul of South Korean capital market laws. He currently faces class-action lawsuits in both the U.S. and South Korea. The U.S. Securities and Exchange Commission is investigating whether Terraform Labs and Kwonduped investors by calling TerraUSD a stablecoin.
“Prosecutors are keen to punish him as an example, but it is a different matter if he will actually be found guilty in court,” said Kim Hyung-joong from Korea University’s crypto research department.
Price turns bearish after burn
The Tom DeMark (TD) Sequential indicator currently presents a sell signal on LUNC’s four-hour chart. The bearish formation developed as a green nine candlestick, anticipating a one to four candlesticks correction. A spike in selling pressure that pushes LUNC price below its 50-hour moving average at $0.00031 can validate the pessimistic outlook. If this were to happen, LUNC would likely retrace toward its 100-hour moving average at $0.00025.
LUNC price must print a 4-hour candlestick close above the recent high at $0.00037 to invalidate the bearish thesis. The upswing could give LUNC the strength to advance to $0.00046.
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