Terra founder Do Kwon Says Sending LUNA To Burn Address makes you Lose Your Tokens and nothing else.
LUNA and UST are still battling the heavy bearish sentiments hanging over their markets.
Do Kwon and his team at Terra have been trying to find a way to revive the ecosystem. One of the ways that have been proposed to shore up LUNA’s prices is burning the excess tokens to create demand. However, Do Kwon seems to be hesitant to do so.
The Terra founder tried to justify his misgivings about burning LUNA in a recent tweet. According to him, burning the tokens doesn’t serve any good purpose except that the tokens end up lost.
“To clarify, as I’ve noted multiple times, I don’t think sending tokens to this address to burn tokens is a good idea – nothing happens except that you lose your tokens. Want there to be no confusion whatsoever.”
To clarify, as I’ve noted multiple times i dont think sending tokens to this address to burn tokens is a good idea – nothing happens except that you lose your tokens
Want there to be no confusion whatsoever https://t.co/GrzG9cclAr
— Do Kwon ? (@stablekwon) May 23, 2022
Burning tokens involves sending the extra coins to an address, after which they’re forgotten and removed from the ecosystem. Basically, this is supposed to reduce the number of tokens in circulation and create demand, resulting in a price boost for the crypto.
The Terra Community Wants Luna Burned
Do Kwon was reacting to the pressure piled on him by the Terra community to burn the extra coins and save the crypto’s price that has been in the gutters since the crash started days ago.
In an earlier tweet, Kwon had shared the burning address after many people demanded to see the address.
terra1sk06e3dyexuq4shw77y3dsv480xv42mq73anxu
There u go
— Do Kwon ? (@stablekwon) May 21, 2022
The Terra community has been trying to get Do Kwon and the Terra team to burn LUNA for days now. Critics, including Binance CEO, have faulted Do Kwon and his team for not grabbing the opportunity to use the reserves to shore up the price during the onset of the crash. The exchange CEO also opined that Do Kwon should have burned LUNA instead of minting more.
CZ vigorously castigates Terra (LUNA), saying, “Most Stupid Design Flaw Is Thinking Minting More Of An Asset Will Increase Total Value.”
Other Crypto Networks Are Doing It
Burning tokens have become common among many crypto networks, including Binance coin (BNB) and even Shiba Inu. A quick look at the market dynamics of the cryptos suggests that this mechanism works. This is why many people don’t understand why Do Kwon and the Terra team are opposed to burning tokens.
All big chains like Binance chain’s BNB, Ethereum chain’s ETH, and Polygon’s MATIC are continuously involved in burning coins to reduce supply and help price over time. Even meme coins like Shiba Inu and Babydoge particularly deploy burns to aid the supply.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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