Binance Announces Changes To Its TerraClassic Burning Mechanism

Binance, the world's largest cryptocurrency exchange, announced a change to the way it burns TerraClassic (LUNC).

Binance has been burning LUNC tokens since last month, which has significantly reduced the token's circulating supply by billions. It did not follow the proposed 1.2% tax on TerraClassic and instead, burned "all trading fees collected on the LUNC/BUSD and LUNC/USDT spot and margin trading pairs" on its platform.

The fees are then converted to Terra Classic tokens and destroyed permanently by sending them to a dead wallet. Interestingly, the CEX (centralized exchange) will no longer use this burning mechanism following the announcement it made Tuesday.

The exchange said it "will reduce the 1.2% consolidation fee for all LUNC and USTC deposits received by Binance to 0.2%" for deposits and withdrawals. "Users will receive the withdrawal amount minus withdrawal fees charged by Binance and the 0.2% tax burn," it explained.

The move was in relation to the recently passed TerraClassic's Proposal 5234. The proposal "reduces the tax burn for on-chain transactions of LUNC and USTC on Terra Classic network from 1.2% to 0.2%." Binance said changes on its LUNC tax burn took effect Wednesday.

Since Binance started its LUNC burning mechanism, it has destroyed 8,588,471,344.33 LUNC or $2,779,715.97 based on the prevailing market price. It also burned 2,500,382,131.16 LUNC or around $659,300.76 for transactions between Oct. 9 and Oct. 15.

Twitter user LUNC Burn, which keeps track of the community's burning activities, reported Monday that 22.17 billion TerraClassic tokens have been burned. While the total supply is 6.86 trillion, the burn rate has surged to 704 million tokens per day since the mechanism has been implemented.

The latest proposal for burning TerraClassic, as well as Binance's third LUNC burn, seemingly failed to attract major price momentum. LUNC was trading down 0.73% at $0.0002539 with a 24-hour volume of $258,978,461 as of 9.30 p.m. ET Wednesday, according to data from CoinMarketCap.