As already read on Crypto Insiders, the price of terra (LUNA) was able to rise sharply yesterday. This had to do with a so-called token burn† The Terra community sends LUNA to a specific address shared by founder Do Kwon to permanently destroy tokens.
The LUNA price completely collapsed two weeks ago after the algorithm broke down on the stablecoin terraUSD (UST) and the LUNA supply rose exponentially. Do Kwon unveiled a plan to revive the Terra project last week, but it was criticized by the community.
Do Kwon shares LUNA token burn address
The community sees a token burn as a better solution, so the Terra founder and CEO of TerraForm Labs has reluctantly shared a wallet address on Twitter. Tokens sent to this address will be permanently destroyed. He emphasized last night that he does not think this is a good idea and that LUNA holders will not get anything in return except that they have lost their tokens:
To clarify, as I’ve noted multiple times i dont think sending tokens to this address to burn tokens is a good idea – nothing happens except that you lose your tokens
Because there to be no confusion whatsoever https://t.co/GrzG9cclAr
— Do Kwon 🌕 (@stablekwon) May 23, 2022
“Just to clarify, as I’ve pointed out several times, I don’t think it’s a good idea to send tokens to this address to destroy them – nothing happens except you lose your tokens.
People kept asking for the address before destroying. I’m happy to share the address for your information, but just want to clarify that you shouldn’t destroy tokens unless you know what you’re doing. I cannot understand it myself.”
Kwon wants a so-called hard fork executing a split of the blockchain to save LUNA, but without the UST stablecoin. That included Changpeng Zhao, CEO of Binance, not a good idea. He recently said:
“Supply reduction must be done through a token burn, not a hard fork at an old date, and abandon anyone trying to save the coin.”
The token burn caused the price to shoot from a price of $0.000103 to a high of $0.000217 over the weekend, a rise of no less than 110%. However, that is still 100% below the price of two weeks ago, shortly before the crash started. Keep in mind that LUNA is very risky and there is a good chance that the price could fall sharply again.