Binance, a leading cryptocurrency exchange, has stated that it would support the next Terra Classic ($LUNC) network update, which will occur at epoch 15,029 and will reduce seigniorage rewards on the network to 0%.
Deposits and withdrawals for $LUNC, $USTC, and $ANC via the Terra Classic network will be suspended early January 14, at 03:50 UTC, with the network update expected to take around three hours, according to an announcement published by the cryptocurrency exchange.
The exchange also stated that it will handle “all technical needs involved for all customers holding LUNC, USTC, and ANC in their Binance account,” and that it will assess and adjust Terra Classic network withdrawal costs “in accordance with market conditions” when applicable.
Binance will subsequently resume deposits and withdrawals if it judges “the updated network to be stable,” without notifying users of the change.
The original Terra ecosystem broke earlier this year and was later rebranded as Terra Classic, while the Terra brand was taken over by a new, forked network. When Terra’s ecosystem disintegrated, its circulating supply increased from 340 million tokens to 6.9 trillion, and to fight the inflation, $LUNC supporters imposed a 1.2% tax burn on all network transactions.
Binance has been supporting the network’s token burns, and in its third round of burns, it destroyed 2.5 billion tokens in a single transaction, permanently removing them from circulation. According to Binance’s pages, the $LUNC tokens were valued almost $660,000 at the time of the burn and were destroyed in response to the $LUNC community’s suggestion to burn trading fees on-chain.
The upcoming Terra Classic upgrade will deprecate the Seigniorage Reward Policy in order to prevent burned $LUNC from being reminted, as well as quintuple network gas fees in order to “capitalise the Community Pool and enhance Validator/Staking Rewards.”
The cryptocurrency’s community adopted a proposal deprecating the seigniorage incentive since it has “become a relatively defunct source of income for the CP [Community Pool], and is causing more harm than good to the community.
As previously reported, the Terra Classic community has been fighting for broader adoption, including creating a petition to be listed on cryptocurrency exchange Coinbase.