Terra’s Luna Classic has enjoyed a bit of renaissance in the past week as its value saw a significant rise after the introduction of a 1.2% burn tax on all swaps.
The token traded for as high as $0.00031131 during the week before losing some of the gains. As of press time, it is trading at $0.0002604.
Regardless of this, LUNC is one of the best-performing cryptocurrencies in the prevailing bear market. Since its historical implosion in May, the asset has risen by over 25,000% during the last four months.
In the last 30 days alone, LUNC is up 160.5% and by almost 200% in the past 14 days.
Terra Community Wants to Revive The Ecosystem
Since then, the developers have handed the blockchain governance to the community, who are now looking to redeem the cryptocurrency.
Before the new 1.2% burn mechanism, the existing burn rate has already led to the removal of over 3 billion tokens from circulation.
Additionally, the staking mechanism on Terra has aided the price rebound for the token. The staking ratio was 2.6% of the total supply on August 27. But it has now reached 7.5%.
The 37% APY staking rewards are the major factor attracting more stakers. But these high returns bear similarities to unsustainable yields that caused the collapse of the original ecosystem.
Nevertheless, many are enthusiastic about the new burn mechanism, which will go live on September 12. It will apply to swaps on-chain and exchanges such as Binance and KuCoin.
Once the burn mechanism kicks, it could result in the burn of almost half the supply within a few months, depending on trading volume. However, there are a lot of variables that will influence how effective the burn mechanism would be.