In response to Terra Classic (LUNC) community proposals regarding token burn mechanisms, Binance CEO Changpeng Zhao (CZ) has announced the exchange's revised approach to supporting LUNC supply reduction—focusing on transaction fee burns rather than implementing the controversial 1.2% tax.
Binance's Compromise Solution for LUNC Burns
After evaluating community feedback through AMA discussions, Binance confirmed it will convert trading fees from LUNC/BUSD and LUNC/USDT spot/margin pairs into LUNC for periodic burns, covering all on-chain transfer costs. Key operational details:
- First Burn Batch: Covers transactions from September 21 to October 2, 2022 (UTC). Liquidity provider rebates during this period are excluded from calculations.
- Weekly Process: Trading fees collected from LUNC pairs will be converted to LUNC and burned, with results published every Monday.
CZ emphasized this method balances fairness for users with LUNC’s deflationary goals:
"This way we can be fair to all users. The trading experience and liquidity remain the same, and Binance can still contribute to the supply decrease of LUNC, which is what the community wants."
— CZ’s Tweet (September 26, 2022)
Market Reaction: LUNC Surges 20%
The announcement triggered a 20%+ price rally for LUNC as traders welcomed Binance’s participation in supply reduction. However, analysts caution that sustained price recovery depends on broader adoption of burn mechanisms across exchanges.
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FAQs
Q: Why isn’t Binance enforcing LUNC’s 1.2% burn tax?
A: CZ stated the tax would disrupt trading liquidity. Instead, Binance burns 100% of fees from designated LUNC pairs—a middle-ground solution.
Q: How often will Binance burn LUNC?
A: Weekly. Fee conversions occur every 7 days, with burns executed the following Monday.
Q: Does this affect LUNC staking or other utilities?
A: No. This mechanism only applies to spot/margin trading fees on Binance.
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