Terra Classic (LUNC) Holders Mentally Prepare for $1 After Historic 250B LUNC Burn

Terra Classic (LUNC), one of the flagship crypto assets for the layer-1 Terra blockchain, has burnt over 250 billion units of its circulating supply. The coin saw nearly a mild 5% price surge within an hour after the burn. Still, LUNC holders are gearing up for more price gains. But will such a price gain occur?

250B LUNC Burnt

Crypto projects execute token burns to reduce a cryptocurrency’s circulating supply, potentially boosting its scarcity and, therefore, its price. Projects like BNB Chain, Ethereum, PancakeSwap, and Bonk have embraced the mechanism to enhance their asset’s value.

Terra Classic, however, appears to be taking a different route. The latest burn is likely part of the project developer team’s efforts to comply with a directive from the United States Securities and Exchange Commission (SEC).

In May 2022, Terra’s LUNA and UST crashed, triggering a massive crypto market decline. Various projects that have invested in the blockchain and its flagship coins sat in losses. Following its crash, the same crypto assets resurfaced as Terra Classic (LUNC) and TerraClassicUSD (USTC). Investors continue to trade these assets despite their questionable background.

Fast-forward to June 2024, when Terraform Labs and its founder, Do Kwon, were fined $4.5 billion. Part of the settlement required that the development team destroy the LUNC and USTC coins on October 31st, 2024. The court document added that failure to do so will incur judgment from the financial agency.

An X user tweeted that the latest burn is Terraform Labs’ shuttle bridge wallet burn. Two weeks ago, LUNC holders were advised to pull out their funds from the bridge.

On-chain data also showed that LUNC’s sister coin, USTC, saw over 174.5 million of its supply permanently burnt.

While it remains unclear whether the latest burn is in compliance with the SEC’s order, the token burn has boosted LUNC’s value in the near term. The asset currently sells for $0.00008467, representing a 4% price uptick in the last 24 hours. Its daily trading volume has also soared by as much as 35% after the burn.