Court Mandates LUNC Burn in $4.5B Settlement with Terraform Labs

This article is also available in Spanish.

The Terra Classic community is preparing for an upcoming supply shock that the LUNC coin may soon experience. This anticipation stems from a court agreement that has required Terraform Labs to burn the tokens they currently hold.

Court Mandates LUNC Burn as Part of Terraform Labs Settlement

As part of its $4.5 billion settlement with the US Securities and Exchange Commission (SEC), Terraform Labs is obligated to execute LUNC burns. These burns must occur by the end of the month; otherwise, Terraform Labs will incur a penalty. According to the SEC directive, the crypto company must burn or delete the private keys associated with the wallets containing these LUNC coins.

Given the impending deadline, the LUNC burn might take place this week. In preparation for the burn, members of the Terra Classic community have been advised to withdraw their assets that are locked on the Shuttle Bridge, which will also be closed during the LUNC burn and will not reopen.

The forthcoming LUNC burn by Terraform Labs is viewed positively for the coin, as it may generate much-needed bullish momentum and trigger a significant price increase. Furthermore, this aligns with the Terra Classic community’s objective to eliminate as many coins from circulation as possible in an effort to rejuvenate LUNC.

They are confident that this deflationary tactic could assist in driving the coin back to its all-time high (ATH) of $119. According to LUNC Metrics data, 135.54 billion coins have been incinerated since the initiation of these burns on May 13, 2022. In the past week alone, 303.6 million coins have been destroyed. However, the community has considerable work ahead, since LUNC still has a circulating supply of 6.76 trillion.

Additional Measures Taken by the Terra Classic Community

Beyond LUNC burns, the Terra Classic community has implemented other initiatives to work towards revitalizing the coin and restoring its former prominence. This includes crafting proposals aimed at enhancing the LUNC ecosystem and fostering the coin’s adoption.

The most recent proposal from OrbitLabs suggests eliminating the forked mainline modules from the Terra Classic blockchain. This proposal claims it will improve maintainability, reduce technical debt, and align with the broader Cosmos ecosystem.

OrbitLabs further elaborated on the current circumstances within the LUNC ecosystem to emphasize the necessity of this proposal. They articulated that the Terra Classic codebase incorporates several forked versions of Cosmos modules to cater to its unique characteristics. This has caused a divergence in the codebase from the upstream modules, resulting in increased maintenance expenses.

Thus, this innovative strategy aims to ensure that the Terra Classic blockchain remains up-to-date with the latest security features and developments from the Cosmos development team. This will significantly lower maintenance costs and time.

At present, LUNC is trading around $0.0000925, reflecting a decline of over 2% in the last 24 hours, based on data from CoinMarketCap.