Binance Makes Key Changes To LUNC Burns In Response To Token Re-mints

Binance will delay its next LUNC burn till March.

Binance, the world’s largest crypto exchange by trading volume, has changed the rules of its voluntary burn of Terra Luna Classic (LUNC) trading fees, per a blog post from the exchange today.

Notably, from December, Binance will only burn 50% of all LUNC spot and margin trading fees instead of 100%. Additionally, it will delay the next batch of LUNC burns to March 1, 2023. 

Previously, it was scheduled to conduct its next batch of LUNC burns on January 1, 2023.

The crypto exchange said it is delaying the next burn to prevent its LUNC burns from being part of token re-mints in response to Terra Classic proposals 10983 and 11111. To this end, Binance said it is in contact with the Terra Grants Foundation to create a burn wallet for Binance that will not be subject to token re-mints. Additionally, Binance wants its wallet exempted from the 0.2% on-chain tax. 

According to the crypto exchange, this is in line with the original desire of the community to see the LUNC supply reduced.

Binance remains the largest LUNC burner, with over 20 billion LUNC burnt, representing over 50% of all LUNC burns. The crypto exchange implemented burns on all LUNC trading fees in September in response to the community’s demand for LUNC burn support. So far, it has sacrificed millions of dollars to support the cause of reducing the LUNC supply. However, recent controversial proposals have put this support to the test. 

Proposal 10983 suggested that the community re-mint 50% of all LUNC burns instead of 10% (including Binance burns) to beef up the community pool and fund development. While the proposal hoped to address the lack of funding for Terra Classic development activity, it drew the ire of community members, who believed it could jeopardize the community’s relationship with voluntary supporters like Binance.

However, despite these concerns, the proposal passed, prompting Matt’s Market to submit proposal 11111, which recently passed to repeal the provisions of 10983. While Binance has not stopped its LUNC burns in response to these proposals, as some previously feared, the crypto exchange has been forced to rethink its approach. 

Unsurprisingly, many are not pleased with the outcome, but most are grateful for the continued support.

Terra Grants Foundation director Edward Kim in response to the Binance update, has launched a proposal to exclude voluntary LUNC burns from seigniorage. Instead, the Terra Classic core developer suggests that the community should re-mint 50% of the burns from the on-chain tax parameter alone.

In consultation with members of the community and Binance, we are looking at refactoring the burn antehandler. Please see the discussion here, https://t.co/zJa67Ug0Su

— Edward Kim (@edk208) December 28, 2022