According to CoinGecko, with the activation of the v22 update on the Terra Luna Classic network in the past two weeks, the prices of the local cryptocurrency LUNAC have increased by 431%. The update brought delegation and staking functions back to the blockchain and also introduced a mechanism to burn some of the transaction fees.

At the time of writing, the asset is trading around $0.0053. Most of the daily trading volume is concentrated on Binance ($1.5 billion), BtcTurk ($0.3 billion) and KuCoin ($ 0.29 billion) exchanges.

Trading volume on Binance increased significantly after KuCoin announced that it was suspending accepting margin orders to buy LUNAC. The latest platform is a key investor in Terraform Labs.

After the collapse of the Terra ecosystem, Terraform Labs developers released a patch focusing on blockchain security. The update disabled cross-chain bridging, authorization and determination, the ability to launch new validators, and the exchange mechanism for LUNA and UST.

To reboot the network, the Terra Rebels startup group introduced the v22 update designed to return disabled features to the blockchain. According to the statement, the update should also lay the foundation for an effective mechanism for burning some of the commissions.

On August 26, the team activated v22 – users were able to participate in network administration. A 1.2% “transaction tax” has been included in the blockchain, its size may change in the future. The network is putting deflationary pressure on the LUNAC supply by withdrawing the cryptocurrency received as part of these fees.

According to analyst Miles Deutscher, with a trade volume of $1 billion and a certain tax amount, the blockchain will pull approximately 120 billion LUNACs from circulation per day.

11/ As a reference, today $LUNC It was $1 billion. If the ecosystem upgrade was already live, this would result in the burning of 120 billion tokens (1.7% of the total supply).

If the same rate is maintained for 30 days, 3.6T tokens (about half of the total supply) will be burned.

— Miles Deutscher (@milesdeutscher) September 1, 2022

Edward Kim of Terra Rebels stated that the team cannot tax off-chain transactions, especially transactions on centralized platforms.

“One of the main objectives of implementation and execution [механизма сжигания] is to convey that the community can and will impose a tax. He wants the same thing to happen at CEX,” he wrote.

Earlier, Binance head Changpeng Zhao criticized Terra developers for the lack of a system for withdrawing coins from circulation on the blockchain.

They don’t even burn for on-chain transactions, do they?

— CZ Binance (@cz_binance) July 4, 2022

The Terra Rebels initiative has already been supported by some central platforms. In particular, KuCoin has announced a related decision.

Kim also added that the team plans to relaunch the TerraClassicUSD (USTC) algorithmic stablecoin. To do this, the developers plan to “restructure the bad debt” of the ecosystem.

Recall that Terraform Labs launched the Terra 2.0 project mainnet in May 2022.

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