Binance has announced that the Terra Classic (LUNC) token burn will be postponed until 2023.
LUNC is a token formed from the Terra network following the May crash of Luna.
Process Postponed Till Next Year
Binance, the number one crypto exchange by trading volume, has announced that it will halt this burning of Terra Foundation tokens until 2023. It also reveals that it will only burn half of the fees gotten from the tokens’ trade.
According to public information, the Terra rebels are to be held accountable for the suspension and delay until 2023.
Binance had previously stated that it intended to burn the transaction fees accrued from the token, but CZ recently declared that this step would be suspended until 2023.
It was established that the circumstances that followed suggestions to fund the assets pool were what led to this move.
Only half of the LUNC position and trade margin in the market, according to the exchange, will be burned.
Additionally, Binance stated that in commitment to its partnership with the Terra Community, it would alter the method and practices for the burning process in order to reduce the availability of tokens after the burn.
In the crypto space, burning is used to create scarcity.
When a token is burned, a calculated sum of it is transferred to a wallet that only receives tokens but cannot transfer them, causing it to be lost permanently and referred to as burned.
As the saying goes, scarcity breeds value, and as these tokens are burned, scarcity increases, hence increasing the value of each token.
However, as indicated by Binance, just half of the LUNC margin and position will be burned.
Healthy And Beneficial Partnership
This collaboration between Terra Foundation and Binance has been deemed healthy and beneficial.
However, trade fees will not be burned alongside the half set aside for burning.
The minting of new Terra tokens would be halted until the community approves any proposed action to be taken as regards LUNC tokens.
The Terra Foundation has held discussions with Binance about making adjustments to their collaboration. This change involves giving whitelists to Binance wallets, which will assist Terra Foundation in evading taxes while moving these tokens; as this would help to conserve funds.
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