Why Are People Burning Their LUNA?
Over 280 million LUNA have been sent to an address which permanently removes it from circulation, a process also known as burning
Source: Shutterstock
key takeaways
- A tweet from Terra founder Do Kwon set off a community meme to “burn” LUNA
- The burn’s effect on the LUNA supply is negligible, and people are wasting whatever value they have left by opting out of the planned network relaunch
The influential founder and CEO of Terraform Labs, creator of the Terra blockchain, on Saturday engaged in a de facto Twitter question and answer session. Topics ranged from whether he’s on the run from tax authorities in Seoul, and why the company’s lawyers have all quit, to his thoughts on the latest Terra “rebirth” proposal details.
In the process, one respondent inquired about burning LUNA — a mechanism by which LUNA holders can effectively send their tokens into a black hole to reduce the circulating supply.
About 10,000 retweets and quote tweets later, and 280.67 million LUNA, across some 2,500 transactions has been sent into oblivion — worth about $52,000, as of Monday at 12:30 pm ET.
That’s a drop in the bucket given the LUNA circulating supply of 6.5 trillion, but most participants seem to be operating under the influence of memes and wishful thinking.
Transactions of LUNA since May 21, 2022; Source: Bitquery.io
The burning frenzy comes as LUNA’s price has increased by about 75%, trading around 0.000185 at time of writing. At its April 5, 2022, LUNA traded at $119.
By burning tokens, LUNA holders forfeit any eligibility for new LUNA tokens following a planned May 27 snapshot and launch of the new network.
Do Kwon later attempted to clear up any confusion over the merits of the idea.
“To clarify, as I’ve noted multiple times, I don’t think sending tokens to this address to burn tokens is a good idea — nothing happens except that you lose your tokens,” he wrote on Twitter.
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