Terra Luna Classic Burns 726 Million USTC from Anchor Protocol

• The LUNC community burned 726 million USTC from Anchor Protocol, raising hopes for a price rally despite low trading volume.
• A potential increase in the burn tax to 1.5% could accelerate token burns and support long-term staking rewards in the Terra Luna Classic ecosystem.

As highlighted in a recent CNF update, Terra Luna Classic planned to burn 1 billion USTC and 275 billion LUNC. The Terra Luna Classic (LUNC) community recently burned 726 million USTC tokens from Anchor Protocol after passing proposal 12135.

This action came after a U.S. bankruptcy court approved Terraform Labs (TFL) to wind down its operations. With this legal approval, the community now anticipates burning billions of LUNC and USTC tokens across various related projects.

Furthermore, whether this could revive token prices can be considered in light of CNF’s insight, which states:

If the burn tax is increased to 1.5%, the burn tax allocation will rise from 0.4% to 1.2%. This adjustment would effectively triple the contribution rates to both the community pool and the oracle pool. The increase in the burning tax is expected to accelerate the pace of burning LUNC and USTC tokens, as well as boost funding for the community pool and the oracle pool, which supports long-term staking rewards.

LUNC and USTC: Price Rally Coming After Token Burn?

Following the token burn, despite a price uptick, trading volume remained low due to broader market pressures. Terra Classic (LUNC) is trading at $0.00008524, up 0.64% in the past day and 3.74% in the past week. See the LUNC price chart below.

These price movements suggest moderate optimism in the market amid the ongoing developments surrounding the Terra Luna Classic ecosystem.

Nevertheless, the burn was executed through a contract migration in Anchor Protocol, and the proposal narrowly passed with 27.23% of votes in favor. While only 25% of validators supported the proposal, 92% of delegators voted “Yes” since the tokens are considered community assets.

Although the developer successfully migrated Anchor Protocol’s contract, an attempt to burn 46 million USTC in Mirror Protocol failed, prompting further investigation.