LUNC and USTC are up 107 and 26% respectively at the time of writing this post. So what is happening?
The majority of the crypto community have already written off USTC and LUNC as a failed project. However, the LUNA community, also called Lunatics, have been working hard behind the scenes to resurrect LUNA. The LUNA community recently passed the vote on a burning protocol which will implement a 1.2% burn fee on all transactions on the Terra blockchain.
So why the pump?
The pump is most likely the community's anticipation of the new protocol’s implementation. The LUNC burn is not live yet but will be implemented on 12th September. Hence, the pump we are seeing now cannot be due to the burn tax.
It is hard to say whether this pump is due to people getting excited about the new development and buying as they expect the price to appreciate, or if the pump is created by the community to increase awareness of the LUNC project and the new burning mechanism.
Will it work?
We see many posts on Twitter advocating a LUNC return to 1$. This of course would be lovely for everyone holding some LUNA, but let’s be realistic, LUNC at 1$ means a market cap of around 7 trillion, that’s 7,000,000,000,000 USD. That’s around 20x bitcoins market cap. The same goes for repegging UST, right now it is a long way away.
But as for the burn itself and the revival of LUNC. Maybe.
Initial criticism of the plan was that the majority of LUNC transactions actually happen off-chain. So they didn’t expect the burn to be too significant. But the LUNC community has been working with exchange platforms to implement the burn tax on the platforms as well!
The first platform to agree to implementing the burn tax on the exchange was MEXC. See article below:
https://support.mexc.com/hc/en-001/articles/10122048174105-MEXC-Will-Support-LUNC-Upgrade-and-Burning-of-LUNC-Spot-Trading-Fees-
See here where Changpeng Zhao, Binance CEO, discusses the burn tax and says: “As long as there is a fair way that applies to everybody, we are more than happy to support whatever the community agrees on.”
The one thing that is loud and clear from this development is that LUNC is not done yet. The community is devoted to reviving the crypto and the blockchain with new developments and hardcore devotion. I personally will not write off LUNC just yet 😉
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