๐Here's Why the LUNC Price Dropped 23% Over the Weekend
๐Over the weekend, the price of the LUNC token surged significantly, causing the Terra community to celebrate. The activities of Binance, the leading cryptocurrency exchange, have been blamed by a community member for this price increase.
๐More Lunc Tokens Are Burned by Binance
In an X (formerly Twitter) post, Terra user MrDiamondhandz claimed that Binance was to blame for the current price increase that followed their LUNC token burning. According to LUNC Metrics' data, on February 1st, the biggest cryptocurrency exchange burnt more than 2 billion tokens.
A price rise for LUNC was the end result of such action. The cryptocurrency token's volume increased by more than 700% on February 4, making it one of the top gainers of the weekend. Possible contributing factor to the continuous upward trend might have been Binance's burning of an extra 135,000 LUNC tokens on the same day.
๐In the aftermath of the LUNA collapse in May 2022, the Terra community implemented many measures to bring LUNC back to life, one of which being token burning. As a result, Binance decided to impose a 1.2% burn tax on all on-chain transactions. Limiting the amount of LUNC in circulation to 10 billion is the long-term objective.
๐The Ecosystem Benefits From Binance
๐Binance has been instrumental in facilitating the completion of these token burning. So far, the crypto exchange has burnt more than 51 billion tokens, making it the top LUNC burner. At 52.2% of all tokens taken from circulation, that statistic is equally significant. Burns during February were preceded by Binance's January burn of more over 5.5 billion tokens.
๐To make the crypto currency achieving $1 a reality, a large percentage of the 5.78 trillion LUNC tokens remaining in circulation will have to be burnt. There has to be a spike in demand for the token for token burns to be effective on their own. This explains why the LUNC development team is persistent in seeking ways to make the software more useful.
