Terraform Labs shuts down Shuttle Bridge in the midst of regulatory settlement, resulting in the burning of 251B LUNC and 264M USTC by Terra Luna Classic.
Terraform Labs (TFL) has conducted a significant token fire, removing 251 billion Terra Luna Classic (LUNC) and 264 million TerraClassicUSD (USTC) tokens from circulation.
The burn was a component of a settlement with the U.S. Securities and Exchange Commission (SEC) that mandated TFL to dispose of specific assets stored in its Shuttle Bridge purses.
This action has sparked discussions within the crypto community regarding the potential for LUNC to surpass the $1 threshold, fuelling speculation of a potential price increase.
Terra Luna Classic Burns LUNC and USTC Holdings
The recent burn event is associated with TFL’s decision to permanently close the Shuttle Bridge, a cross-chain transfer solution for Terra Luna Classic tokens, according to an update on X (formerly Twitter).
TFL decommissioned the bridge on October 31, 2024, as a precaution to prevent legal complications. To satisfy regulatory obligations, TFL pledged to eliminate the tokens stored in the Shuttle Bridge purses as part of the US SEC settlement.
The fire eliminated approximately 4% of the LUNC supply, estimated at approximately 5.45 trillion tokens.
Although this may appear substantial when viewed in terms of the figures, market experts argue that more is needed to cause a significant increase in prices due to a lack of sufficient demand.
The 264 million tokens burned by TerraClassicUSD (USTC) also resulted in a substantial reduction, although this represents a smaller portion of the 5.56 billion circulating supply.
Price Reaction of LUNC and USTC
The market has reacted cautiously despite the significant decrease in circulating supply. According to data from CoinMarketCap, the price of LUNC increased by 3%, while the cost of USTC increased by 1.70%.
The recent combustion represents only a fraction of the total amount in circulation, which analysts attribute to the ample supply of these tokens, resulting in limited price movement.
“It is beneficial that the supply has decreased; however, it is unlikely that this will significantly impact prices because there are still billions of units in circulation,” stated a market analyst.
This relative tranquility implies that token utility and consumer appetite are required to achieve more substantial gains despite the potential for fires to reduce supply.
Although the immediate price impact was minimal, technical indicators indicate the potential for a future upward trend. An analysts’ “falling wedge” pattern has been detected on the price chart of LUNC, a formation that typically indicates a bullish reversal. This pattern frequently indicates a potential breach when prices oscillate between converging trendlines.
Currently, the support levels for LUNC are approximately $0.000083572, and there is a significant amount of purchasing interest. The pattern’s resistance progressively decreases, suggesting that bearish sentiment is waning.
Some analysts anticipate that LUNC could pursue a target price of approximately $0.0001 if it surpasses the upper trendline, which could pave the way for additional gains if market conditions are favorable.
Current Community and Exchange Initiatives
The Terra Luna Classic community has maintained its commitment to the ecosystem by implementing additional tax reforms and fire initiatives. Additionally, Binance has been contributing to the flame initiatives. Binance recently eliminated more than 1 billion tokens from circulation in its 27th wave of LUNC burns. Due to these contributions, the community’s total LUNC burnt is now approaching 137 billion.
Additionally, the Terra Luna Classic blockchain’s transactions were recently simplified by the community approving a new tax proposal.
This “Reverse Charge” tax mechanism is intended to simplify the process of deducting taxes, thereby simplifying how users and developers interact with the platform. The path to $1 remains determined, but these community-driven efforts demonstrate an ongoing commitment to enhancing LUNC’s value.
