Binance throws support at Luna
Binance recently confirmed that it will support the upcoming network upgrade of Terra Classic – an innovative, fast, and secure blockchain that enables decentralized finance (DeFi) transactions, data management, and smart contract execution with low fees.
The upgrade is highly anticipated due to its potential to bring substantial improvements in scalability, security, and usability. With the technical upgrades in place, Terra Classic will be able to offer more seamless integrations with other digital asset exchanges as well as more efficient payment processing.
Binance recognizes that this network upgrade is a significant milestone in the DeFi sector and further cement its leadership position in the industry. Allowing users to take part in these exciting new advancements while still being protected by a market-leading exchange demonstrates Binance’s commitment to always delivering top-notch security measures for their users.
Terra Classic, also known as LUNC, is a project that emerged from the collapsed Terra ecosystem. “Burning” a token refers to sending it to a cryptocurrency address that isn’t controlled by any user, thereby removing coins from the circulating supply. This move can have a positive impact on the token’s price action. Binance, which accounts for over 50% of the trading volume for LUNC and has been supporting the Terra Classic community with monthly LUNC burns, estimates that the upgrade will take approximately three hours.
During this time, Binance will disable deposits and withdrawals for USTC, LUNC, and ANC. However, users will still be able to trade as normal.
Proposal 11242 includes two major changes that will affect LUNC token holders. First, it eliminates the re-minting of burnt LUNC tokens, which means that any tokens that were destroyed or lost can no longer be recovered. Second, it increases gas fees in order to fund a community oracle pool. This pool will provide data to decentralized applications (dApps) on the BSC network, allowing them to function properly and securely.
The governance proposal 11242 was released at the beginning of January following a dramatic decrease in the on-chain burn rate of LUNC tokens in the previous four weeks. The proposal aims to stop the re-minting of LUNC tokens from burns by effectively setting the seigniorage reward policy to zero. The proposal received 66% of the network’s votes, with 96% voting in favor.
The second part of the proposal aims to increase the network’s gas fees by 500% to fund the community oracle pool. This will increase staking rewards, and the proposal received almost 90% of “Yes” votes.
Before the proposal was approved, 10% of LUNC tokens were re-minted from the 0.2% burn tax after each epoch and added to the community pool. With the proposal approved, the seigniorage reward policy has been set to zero, effectively stopping LUNC from re-minting from burns.
The price of LUNC has spiked by more than 6% following Binance’s announcement, hitting a two-week high of $0.00017668, before backtracking to $0.00017056 by press time, according to CoinGecko.
Terra Classic is a decentralized platform that aims to create a stable, high-performance blockchain that is accessible to everyone. It is based on the Tendermint consensus algorithm, which is a variant of the Practical Byzantine Fault Tolerance (PBFT) algorithm. The Terra Classic protocol aims to provide a sustainable ecosystem for decentralized applications and decentralized finance (DeFi) platforms.
Binance’s support for the Terra Classic upgrade is a positive development for the LUNC community. The upgrade aims to eliminate the re-minting of burnt LUNC tokens and increase staking rewards by increasing the network’s gas fees. This move is expected to have a positive impact on the LUNC token’s price action and strengthen the Terra Classic ecosystem.