Terra’s native token, which recently suffered a major crash LUNA and its associated stablecoin, UST, is looking for ways to heal from that collapse. One of the rescue plans on social media was also supported by Ethereum founder Vitalik Buterin. We shared the news about the recovery plan with you.
Of course, aside from these rescue plans, the most classical method known is to reduce the current supply by burning. So, does the Terra ecosystem have the capacity to burn trillions of LUNA tokens?
Shiba Inu (SHIB) is undoubtedly the most well-known altcoin that comes to the fore with burning transactions. The SHIB community acts with a common feeling in the burning processes that are carried out regularly, supporting the incineration and trying to increase the price by narrowing the supply. So, does this common feeling work among Terra (LUNA) investors?
Will Terra (LUNA) Supply Be Burned?
It is now known that Terra’s current rescue plans focus on “forks” rather than incineration, and there are not many direct plans for incineration. However, the forking method was rejected by many in the community, and there was a demand for burning.
The most well-known name supporting these burning processes is Binance CEOThe water was CZ. CZ has been keeping a close relationship with the Terra team since the delisting of LUNA and UST, as demonstrated in his Twitter posts.
Reducing supply should be done via burn, not fork at an old date, and abandon everyone who tried to rescue the coin.
I don’t own any LUNA or UST either. just commenting.
— CZ 🔶 Binance (@cz_binance) May 14, 2022
The LUNA community, on the other hand, believes that if there is a major burn, there will be a recovery towards the $1 level. However, how much this big burn will be is a big problem because the LUNA supply saw an unexpected growth of 1700% in a very short time and exacerbated the collapse.
Although many communities and users on Twitter believe that Terra will already burn, we would like to point out that there is no official announcement about this yet.
On the other hand, not everyone in the cryptocurrency community supports the burning process. Some Luna owners to buy and burn the supply TerraForm Labs or invoking the Luna Foundation Guard, users questioned where these places would get the money to make such a massive burn.
To anyone saying burn LUNA – the question is… with what money?!?
UST2 collateralised by UST3 secured against insolvency by swaps against UST4?
(3 drinks in – getting off twitter now)
— wassielawyer (@wassielawyer) May 16, 2022
A proposal that gained traction on the Luna Research Forums proposed a 3% incineration tax on transactions. “Based on our volume, which is currently around $3 billion, if we only impose a 3% burn tax on each trade, we could burn approximately 300,000,000 LUNA at the time of writing this proposal,” he said.
Votes on Terra Station are now open for this offer. It has now garnered 28.83 million votes, but it still seems far from reaching enough numbers.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.