Bitfinex has also stated that it is aware of the 1.2% tax burn on Luna Classic, and might join the process.
Terra Luna Classic (LUNC), the native token of the failed Terra project, is slowly gaining investors’ confidence with a massive 49% surge in the last 24 hours. This has been linked to the burn mechanism introduced by Binance.
On Monday, Binance announced that it is introducing a burn mechanism to burn all the trading fees on $LUNC spot and margin trading. This burn mechanism was previously introduced to deposits and withdrawals. According to Binance, fees would be collected in USDT, BUSD, or BNB, then converted to LUNC, and have it deposited into the asset’s burn address.
It is important to note that this decision has taken several considerations. Initially, it was planned to introduce an opt-in button for Terra Luna Classic (LUNC) traders. This was to give options to traders who would voluntarily want to contribute to the burn of the token’s supply. It was planned that when enough users agreed to partake in the process, they would pay an additional burn fee of 1.2% on each trade.
According to Changpeng Zhao, the CEO of Binance, this would not have worked. In fact, the Terra community also had reservations about the plans. Some community members even attempted to stage a campaign to boycott Binance, accusing CZ of reneging on his word to come up with a unilateral burn.
With the latest implementation, users executing LUNC/BUSD and LUNC/USDT trade would be able to contribute to the supply burn without paying any additional fee.
According to CZ, this implementation would be fair to users.
“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,” he said.
Bitfinex has also stated that it is aware of the 1.2% tax burn on Luna Classic, and might join the process.
“Our team is reviewing the required changes needed to support this process, in the meantime, LUNA Classic withdrawals have been temporarily suspended,” said Bitfinex.
The LUNC price has reacted positively with a huge surge to a current price of $0.00029.
Currently, the asset is facing resistance from the $0.0003 area according to analysts. A surge above this would confirm its bullish reversal.
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