A Luna burn of its supply was one proposed idea to help the Luna recovery, but could it still happen?
With the Luna crypto crash seeing the Luna circulating supply skyrocket to over 6.5 trillion coins, several holders wanted to see a Terra Luna burn to decrease this supply and potentially increase its value.
Much like the success of Shiba Inu burns among the SHIB community, will holders be successful at implementing Luna burns?
Will Terra Luna Burn Its Supply?
The Terra recovery plan launched Luna 2.0, meaning a Luna burn was not chosen as the way to save Luna. It did, technically, have the same effect as a burn could in reducing the supply, although deciding to restart the chain was a more nuclear approach. This new chain will launch with 1 billion Luna, a huge decrease from 6.5 trillion.
By burning the Luna, holders hoped this will increase the scarcity of their coins, pushing the price back towards $1. With the supply increasing 1700% in a few days, a major burn would be needed to restore this price.
This initially seemed to be the method favoured by Binance CEO CZ. He remained in close contact with the Luna team ever since the partial Luna delisting on Binance. However, with the Binance Luna 2.0 support, it seems Binance will not contribute to this burn.
Despite the Terra Luna vote approving a new chain, much of the Luna community seemed in favour of a burn. The #BurnLuna hashtag trended on Twitter throughout the voting process.
Not everyone in the cryptocurrency community was in favour of a Luna burn. With some Luna holders calling for TerraForm Labs or the Luna Foundation Guard to buy and burn the supply, users have questioned where these places would get the money to do such huge burns from.
Indeed, Do Kwon has now come out and said TerraForm Labs does not have the funds or coins to burn the Luna circulating supply. "Once again, we don't have that kind of money," he said.
Terra Luna Classic Burn
While Luna 2.0 is taking over as the main form of Luna, a separate coin - Luna Classic - still exists and could help to itch this burning desire.
LUNC holders will hope burning helps push up the Luna Classic price.
With Luna Classic continuing the old Luna's chain, with a circulating supply of 6.5 trillion, these burns will need to be pretty hefty to make an impact.
- Secure Your Crypto: Get Ledger's Nano X Crypto Wallet at Amazon Here
Luna Burn Rate
As the Luna community continued to demand Luna burns, TFL CEO Do Kwon posted the Luna burn address on his Twitter, which seems to have kickstarted a burn movement.
While Kwon asked why holders would do this, stating it is "literally burning money", this has not stopped holders.
According to the explorer, through 3760 transactions, holders have burned 1.05 billion Luna as of June 2. This makes up just making up just 0.016% of the circulating supply.