Terra Classic is determined to make a strong comeback and there are many roadblocks ahead. One of those challenges is the inflated LUNC supply due to the excessive minting when LUNA and UST crashed.
The Terra Classic community plans to address this issue through a 1.2% tax burn. And, a new update reveals healthy progress on this front.
Well, one of the developers working on the 1.2% tax burn mechanism has released an update. He revealed that the code for the burn mechanism was successfully tested on testnet.
However, the update did not reveal when the mechanism will be implemented on mainnet.
The code is now running successfully on the testnet with the 1.2% burn also included #LUNC #LUNACLASSIC #luncburn pic.twitter.com/0zyo70CeGy
— 🔥LUNC-Burn🔥 (@LUNC__Burn) July 17, 2022
Notably, the announcement represents a step in the right direction for LUNC. And, it means deployment on the mainnet will not be far behind.
The developer previously noted that roughly 7.5 to 12 billion LUNC will be burnt every day once the 1.2% burn is implemented on the mainnet.
Terra Classic, at press time had a circulating supply of 6.5 trillion LUNC, which is why such a large amount will be burnt.
Will ‘burn’ have an impact on price?
The LUNC burn should help facilitate a price recovery for LUNC from the massively inflated amount. However, this recovery will be gradual considering the large supply figure.
It should be noted that LUNC experienced significant consolidation in the last two weeks after a solid bull run towards the end of June. Moreover, it traded at $0.000102 on 17 July.
Source: TradingView
The consolidation reflects the profit taking demonstrated by the Money Flow indicator.
However, the MFI, for most of its sessions, has managed to hold steady near the 50% level, which is likely because most LUNC holders are HODLing for the long term.
Terra Classic’s commitment to recovery is evident through its development activity metric.
The cryptocurrency has recorded strong activity since the second week of July. This is in line with the announcements about the 1.2 tax burn.
Its social dominance registered a significant uptick in the last few days courtesy of increased interest in the project’s recovery attempts.
Source: Santiment
Well, increased activity and social visibility may encourage more people to bet on its recovery attempts.
Undeniably, Terra Classic is attempting what is perhaps the biggest comeback in the cryptocurrency and blockchain industry’s future.
It will be quite interesting to see how things play out, especially for LUNC and its holders.