According to on-chain analytics firm Santiment, LUNC, the native asset of the old Terra Chain, is facing high interest from the crypto community as it is seeing a notable rise in related discussions.
🗣️ With the #Terra community passing the 1.2% #taxburn initiative for $LUNC on-chain transactions, there has been a notable rise in discussions related to the asset on socials today. The trending topic should create price volatility in the coming weeks. https://t.co/yZiCxMxHOO pic.twitter.com/2ik50mB3zt
— Santiment (@santimentfeed) September 22, 2022
Its analysts wrote: “With the Terra community passing the 1.2% tax burn initiative for LUNC on-chain transactions, there has been a notable rise in discussions related to the asset on socials today. The trending topic should create price volatility in the coming weeks.”
As to what this might lead to, Santiment predicts that the rise in discussions on social platforms might create price volatility in the coming weeks.
The 1.2% tax burn by LUNC was successfully executed on Sept. 21, after the block height of 9,475,200 was reached. At the time of writing, the price of LUNC is 0.000289 and has decreased by around 4.30% over the past 24 hours. The price has not changed all that much, contrary to the expectations of many who anticipate a tax-burn implementation.
All on-chain transactions, including LUNC and USTC, will be subjected to a 1.2% tax burn under Terra governance. This tax burn will not stop until there are 10 billion LUNC in total supply. The overall supply of LUNC has decreased by 315,007,189, and the current total supply is about 6.9 trillion, according to the StakeBin burn tracker. The Terra community is anticipating using the tax burn to maintain the supply at 10 billion permanently.
Here lies biggest challenge
Will Chen, a former developer at Terra, raises some crucial issues about the sustainability of LUNC: “Who are the LUNC whales? Who controls the network?” And how much ownership does “the community” have relative to a couple of bad actors who bought in at asymptomatic prices?
He indicated that it might be “hard to attract projects to build on Terra Classic until the rebels figure out who they’re working for.” He also highlighted the need to clarify incentives for the blockchain.
As reported by U.Today, Gokhshtein referred to the LUNC token as a lottery ticket, as in the classic musical chairs game for kids.
Gokhshtein also mentioned that LUNC is owned by the community, with half of the members jumping in to gamble, while the other half is those who suffered from the collapse. He believes that it would be an impressive comeback if the community could find a way to build a legitimate use case.