LUNC Burning Mechanism That Caused The Most Recent Market Pump Has Big "If"

Two Whales Move 4.72 Million CRV Tokens Worth $2.11 Million From Binance To Convex

Binance’s Trading Volume Faces Challenge Due To Zero-Fee Promotion Halt

The plan to tack on a 1.2% burning fee to every network transaction was what drove LUNC’s exponential rise at the start of September.

LUNC Burning Mechanism That Caused The Most Recent Market Pump Has Big "If" — LUNC Burning Mechanism That Caused The Most Recent Market Pump Has Big “If”

Investors eager for exposure to the deflationary asset poured billions of dollars into the project, but there is a catch. If centralized exchanges accept the burning fee, the proposal claims that the burning volume would approach $4 million in a single day. This is where possible issues for Luna arise.

/6 Even at face value, daily burn is much more likely to skew to the more conservative scenario, which models at $55k a day. A drop in the bucket for a $3b token that just went up 500% due to the excitement surrounding this proposal.
— light (@lightcrypto) September 11, 2022

The daily burning volume is now only $55,000 thanks to a statement made by one of the major exchanges in the world, Binance, informing their users that they will not impose the fee.

Less than $100,000 in daily burning volume is negligible for a project with a $3 billion market capitalization and will not have any impact on the token’s market value.

Currently, using the network is almost free, and adding a price for transactions will make users’ activity even less active. Since at one point the network’s activity exceeded the total circulation, the on-chain data shows some evidence of manipulation by validators who purposely boosted the number of transactions on the network.

All of these indicators indicate that the preceding spike was based on dubious proposals and on-chain manipulation, which will not have the expected impact on the token’s market value given the actions that centralized exchanges are taking.

On Sept. 15, $34 million worth of LUNC tokens were released

A critical concern is raised by the release of $34 million worth of LUNC tokens on September 15: Who will purchase the entire volume pushed into the market? Due to relisting and a lack of data that would indicate a previous catastrophic decline, Binance was mostly responsible for the spike in trading volume that we previously saw.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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