- Terraform Labs might burn billions of LUNC as its bankruptcy proceedings nears its end.
- Despite general uncertainty in the Terra Luna Classic community, its associated assets have erased their losses.
According to validator HappyCatKripto, Terraform Labs (TFL) could burn 1 billion USTC and 275 billion Terra Luna Classic (LUNC) tokens as part of its Chapter 11 bankruptcy proceedings. While the amount of tokens to be burned remains uncertain, the Terra Luna Classic Community is now questioning the ecosystem’s next move.
1 Billion USTC & 275 Billion LUNC Could Burn
Upcoming burns, timeline and what’s next
Drop a like if you want the #LUNC & #USTC to burn
pic.twitter.com/alf1SuRdzk
— HC Crypto (@HappyCatKripto) September 8, 2024
Preparation for 1 Billion USTC and 275 Billion LUNC Burn
As block explorer Galaxy Finder revealed, 264 billion LUNC and 177 million USTC tokens have been claimed from the shuttle bridge Terraform Labs reopened. Additionally, the validator urged the community to migrate Mirror Protocol and Anchor Protocol contracts to a new code using governance similar to Risk Harbors.
Notably, Terraform Labs owns Mirror Protocol, which has been inactive since the May 2022 crash. The funds related to the Mirror Protocol and Anchor Protocol are Columbus-5 native assets USTC and LUNC. Per a Commonwealth post, the total LUNC burn from Mirror Protocol would be 480,404,166. Additionally, 729,976,293 USTC can be burnt from the Anchor Protocol and 46,556,271 USTC from the Mirror Protocol.
According to TFL’s CEO Chris Armani, the court judgment ordered all Terra Luna Classic assets to be burned. After October 31, TFL will stop interacting with Columbus-5 or Phoenix-1 chains. Any token burn or transfer will be difficult after the court-approved deadline. Per Terra Money, TFL will no longer be able to support future chain upgrades.
As highlighted in our previous article, TFL began winding down its operations with Proposal 4818 upgrade. Changes implemented by the upgrade include a 5% minimum commission rate for validators and the removal of blacklist functionality. Terraform Labs said the winding down of its operations aligns with its settlement with the US SEC.
Meanwhile, as noted in our earlier post, the company settled with the Securities and Exchange Commission. Notably, the regulator sought the forfeiture of $5.3 billion from stablecoin sales and fines totaling $520 million for Terraform Labs and Do Kwon.
Price Reaction from Terra Luna Classic and USTC
Recent positive developments in the crypto community have fueled price rebound for USTC and LUNC tokens. The upward momentum was boosted by Genuine Labs’ announcement that it will shortly proceed with the Tax2Gas chain update following a few tests.
LUNC has experienced a 3% surge in the past 24 hours, setting its price at $0.00007872. The trading volume increased by 26% to $9.27 million, with the market cap settling at $449 million.
In a similar move, USTC’s value increased by 2% to trade at $0.01584 in the past day. However, the trading volume declined by 2.7% to $3.5 million, indicating subdued investor interest. If the ecosystem’s positive switch is sustained, this bearish metric may also be reversed in the near future.
