Share this article
Crypto Terra Luna Classic Surges as Traders Speculate on New Supply Burn Rule
In an attempt to revive the failed Terra blockchain’s token, the approved proposal will destroy 1.2% of every transaction to reduce supply.
Updated May 11, 2023, 3:57 p.m. Published Sep 8, 2022, 4:56 p.m.
Luna classic (LUNC), the renamed native token of the Terra blockchain that dramatically imploded in May, is rising in value as traders bet that a soon-to-be implemented rule may breathe some life into the much-maligned token.
LUNC gained 22% in the past 24 hours, and doubled its price in a week, according to data by crypto intelligence platform Messari. Still, the token is changing hands at a fraction of a cent ($0.00052 to be precise) and it is down more than 99.99% since the start of the year.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
A “tax burn” regime that aims to reduce the token’s hyperinflated supply is likely fueling the rally.
The community approved a proposal that introduces a 1.2% tax rate on every transaction on the blockchain. According to the proposal, the “tax” will automatically be sent to a wallet to destroy (burn) the tokens to bring down gradually LUNC’s bloated circulating supply. The fee rate is expected to take effect on Sept. 20, according to a statement from Binance, the world’s largest crypto exchange by volume.
The rate cannot be enforced on trading the token on centralized exchanges, as a member of the Terra governance forum pointed out, but some exchanges such as MEXC will voluntarily adopt the fee.
Binance also announced Thursday that it will add LUNC trading against Tether's USDT to its trading pair list, starting Friday.
However, the price rise may prove to be short-lived as the new fee parameter is unlikely to attract new investors to the blockchain, according to Edward Moya, senior market analyst at Oanda. “It still remains a tough period for crypto in general and investors still have a bad Terra taste in their mouth from the collapse earlier in the year,” he told CoinDesk.
Howard Greenberg, cryptocurrency educator at Prosper Trading Academy, said that “this is a total speculation play and basically turns LUNC into a meme coin at this point.”
“It will be a very volatile trade, and if someone chooses to enter the trade I would make sure you have an exit plan for both downside and upside.”
The Terra blockchain’s multibillion-dollar implosion in May was the epicenter of the current crypto crisis and led to the insolvency of multiple crypto lenders and investment firms. The network’s algorithmic stablecoin, terraUSD (formerly UST), lost its peg to the dollar, and sent LUNC (formerly LUNA), which was supposed to stabilize the stablecoin, into hyperinflation. The current supply of LUNC is nearly 7 trillion tokens, and even taking into account the new burn it won’t significantly change the coin’s fundamentals.
Most developers and investors have left the network. Those who decided to stay created a duplicate of the Terra blockchain as part of an attempt to have a fresh start for the ecosystem. The old blockchain still remained functional and was rebranded to Terra Classic, hosting the stablecoin USTC and its sister token LUNC.
Read more: Luna (LUNA) vs. Luna Classic (LUNC): What Is the Difference?
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
LUNC Surges Over 160% in a Week as Do Kwon Sentencing and Token Burns Draw Traders
The rally is driven by speculation that a final verdict could bring clarity to the project, as well as technical factors like token burns.
What to know:
- Terra Classic (LUNC) surged 74% to $0.0000072, up 160% in the past week, on exploding trading volume, ahead of Terraform Labs founder Do Kwon's sentencing on Dec. 11.
- The rally is driven by speculation that a final verdict could bring clarity to the project, as well as technical factors like token burns, with 849 million LUNC destroyed in the past week.
- The token's momentum is also fueled by Binance's pause on LUNC withdrawals ahead of the Terra Chain's v2.18 upgrade, which aims to improve network stability, despite the token remaining volatile.
Top Stories
