Terra voted to burn 89 million LUNA tokens and right after the vote we could see the LUNA price fluctuating a lot, so read more about it in the upcoming altcoin news.
Terra voted to burn a large percentage of the tokens and the price hit a record high before falling. Nothing stimulates demand like a decline in supply.
Terra maintains the utility token protocol LUNA and stablecoins, which were developed by Terraform Labs. The community voted to burn about 89 million LUNA tokens valued at $ 4.5 billion, and after co-founder Do Kwon’s proposal was accepted, the price of the token rose from $ 50 to over $ 54 And hit an all-time high of $ 54.77. It fell into a mini market collapse shortly afterwards when the entire crypto market turned red and within hours the price fell 14%. LUNA has a market capitalization of US $ 23.5 billion, but has since leveled off at around US $ 48, so the main purpose of the token for the time being is to maintain a stable 1: 1 exchange rate for the coin according to the Terra algorithm keep. More LUNAs are created when the demand for USTs decreases or they are burned when the demand for stablecoins increases.
1 / Votes online for proposals 133 and 134 to burn 88,675 million pre-Col-5 $ LUNA in the community pool (~ $ 4.5 billion) in exchange for $ US the use of on-chain swap and the reduction of the oracle_rewards_pool distribution from 3 to 2 years is now over!
– Terra (UST) Powered by LUNA (@terra_money) November 10, 2021
After a successful vote, 520,000 LUNA have been withdrawn from circulation and the remaining 88 million are waiting to be incinerated within two weeks, which should further increase the value of LUNA. The vote coincides with the larger plan of the Columbus 5 network upgrade in late September, which changed how and when the Terra protocol burns tokens. After upgrading, instead of transferring LUNA to a communal pool, LUNA minted stablecoins that were burned forever, and the move should add value to the currency.
Kwon referred to the Terra Community team’s token burn as a source of income for an event to raise initial funds for the Ozone protocol. Ozone is an insurance policy for leveraging Terra’s growing decentralized finance space, dealing with loan, trade and savings protocols that eliminate intermediaries such as banks and brokers. Ozone is here for risk management. Although Terraform Labs is based in South Korea, its DeFi endeavors have been hit hard. Kwon was served by the SEC speaking at a cryptocurrency conference in September, and he sued the agency over a subsequent subpoena related to TerraForm’s mirror protocol, which allowed people to trade synthetic versions of real stocks. Ethereum was lucky enough to burn its own coin and the London hard fork implemented EIP-1559, a predictive measure of transaction fees from miners who validate transactions in an undetectable wallet where ETH will be destroyed.