Terraform Labs co-founder and CEO Do Kwon has finally listened to suggestions to burn most of LUNA’s hyperinflated circulating supply of over 6.5 trillion tokens. While he’s still against the idea, Kwon has taken to Twitter to share a LUNA and TerraUSD (UST) burn address.
Over 278 Million LUNA Tokens Burned Despite Do Kwon’s Opposition
The recent death spiral of the algorithmic stablecoin UST is one of the biggest disasters in the history of crypto, eroding tens of billions of dollars in a matter of days.
In response, Do Kwon put forward a plan to revive the ecosystem. The proposal outlines plans to fork Terra into two blockchains: the old chain which would be referred to as Terra Classic going forward and the new chain called Terra without UST. An airdrop is set to follow the chain split.
Over 80% of those with staked LUNA are supporting the rebuilding of the Terra protocol minus the algorithmic stablecoin. But as widely reported, many community members and investors like Binance’s Changpeng Zhao are vocally opposed to the hard fork.
Do Kwon argues that his main priority now is to ensure the Terra community “has a place to build and years of their work does not go to waste”. This is presumably the reason why he gave in and shared a burn address for both LUNA and UST. Any LUNA or UST tokens sent to the address are permanently removed from circulation.
Hours ago, the Terra creator maintained that burning tokens was not a good idea and that “nothing happens except that you lose your tokens”. When asked why he decided to tweet the address anyway, Kwon explained:
“People kept asking for the burn address — happy to provide for information purposes but want to clarify that you should not burn tokens unless you know what you are doing — I for one cannot understand.”
As of press time, the LUNA burn address had received 278.47m tokens, according to data from Bitquery.io. While this figure is minuscule compared to LUNA’s 6.5T supply, it shows that investors are volunteering to destroy their own coins in hopes to prop up the price.
Terra’s Bumpy Post-Collapse Path
Notably, the network has stopped creating new LUNA tokens, which is why investors are convinced burning will make the crypto more scarce and subsequently boost its price due to demand-supply economics.
All eyes have turned to Do Kwon as observers wait to see if he can handle the recovery process wisely and turn things around. As covered by ZyCrypto, Terra’s legal team resigned after the LUNA/UST collapse and some investors are taking Kwon to court for what they suspect was a well-run Ponzi scheme.
Meanwhile, experts are cautioning that regulators will use the Terra debacle as a need for more crypto rules in a bid to enhance investor protections. LUNA is currently highly volatile. As such, users should avoid making any rash investment decisions.
If UST eventually returns to the $1 price point and LUNA reclaims all-time highs, it will surely be the most spectacular crypto comeback of all time.