By George Ward
After the collapse of the Terra ecosystem, the developers came up with another project named Terra Classic to replace the former. With the new project about to undergo an essential update during the weekend, Binance has pledged to support the network upgrade.
Terra Classic Community Vote Inspires Upgrade
The latest update is due to the Terra Classic community vote to implement the governance proposal 11242 to remove the re-minting of part of the burnt LUNC tokens. Accordingly, the upgrade is scheduled to take place on Saturday, January 14, at approximately 04:50 UTC.
Token burning means sending the asset to a crypto address that is not under the control of any individual user. Thus, the process effectively removes coins supply in circulation, which often positively impacts the price performance of such tokens.
The largest crypto exchange globally, Binance, accounts for over 50% of LUNC trading volume and actively supports the Terra Classic community with frequent LUNC burns. Binance usually disables deposits and withdrawals for LUNC, ANC, and USTC during the burn process, but trading will not be affected.
Meanwhile, proposal 11242 was released in early January following the unexpected decline in LUNC’s on-chain burn rates in the last four weeks of 2022. The proposal aims to stop the re-minting of LUNC from burns by setting the reward policy back to zero.
Furthermore, the proposal shows more than 66% of the network’s votes were in favor of the move. Usually, around 10% of LUNC tokens are re-minted out of the 0.2% burn tax following each epoch which is then added to the ecosystem pool.
With the approved proposal, the network’s reward policy will be reset to zero, stopping LUNC re-mints after burns. For the second phase of the proposal, the community aims to increase the network’s transaction fees by 500% to help fund the community oracle pool. This will increase staking rewards, which received close to 90% of votes.
Will LUNC Continue Rally?
Following the bullish trend in the broader crypto market, the price of Terra Classic token LUNC is bracing up for future profit opportunities. The token’s value has continued to increase after rallying by 17% in the second week of January.
Various on-chain data revealed that on January 10, LUNC saw an influx of $250 million in trading volume on Binance, which suggests that high-worth investors are behind the price surge. With the digital asset market enjoying a run of the upward price spike, LUNC has made double-digit gains since January.
The ongoing crypto winter has impacted the industry heavily, such that most of the leading assets have been underperforming in recent months. But the release of the consumer price index (CPI) data and the Federal Reserve easing interest rate hikes has been a source of reprieve for the financial markets.