Binance, the world’s largest cryptocurrency exchange, was in the news after temporarily suspending withdrawals of the stablecoin USD Coin (USDC) in December 2022. Growing concerns reflect the loss of confidence in centralized exchanges following a number of industry scandals in 2022.
However, Binance again makes headlines with a similar line, but on a lighter note. We have temporarily suspended deposits and withdrawals for LUNC, USTC, and ANC. This is the result of a Terra Classic (LUNC) network upgrade triggered by a recent community suggestion.
The Terra Classic (LUNC) network update will begin on epoch 15,029, or around 4:50 AM UTC on January 14th, and will last approximately 3 hours. A temporary suspension of deposits and withdrawals will apply, but LUNC, USTC, and ANC transactions will not be affected by the network update. According to the company’s website, withdrawal fees for LUNC, USTC, and ANC on the Terra Classic (LUNC) network will be reviewed and adjusted by Binance if necessary. Once the improved network is deemed trustworthy, Terra Classic (LUNC) network deposits and withdrawals will be accepted again, but users will not receive any further notifications.
Binance mitigates LUNC burning
By effectively banning LUNC limiting due to burns, the proposal at the heart of the Terra Classic network update seeks to do away with the seigniorage reward policy. We are also looking to increase gas prices by a factor of five (5x) to leverage community pools and increase incentives for validators or staking. The proposal claims that LUNC’s on-chain burn rate has dropped significantly over the past four weeks and will continue to decline as Binance cuts its burn rate.
According to reports, Binance has declared that it will start burning 50% instead of 100% of LUNC spot and margin trading fees in response to recent developments where LUNC burns are being reissued as development funds. The LUNC community is proposing to raise the gasoline tax by a factor of five, given the lower burn rate. “In terms of market value, the Terra Classic gas price is 18.42 times lower than the Terra 2.0. The Terra Classic gas price is 3.68 times cheaper than the Terra 2.0 even with a 5x price increase.
