Binance announces a burn mechanism to burn all trading fees on the Terra Classic spot and margin trading pairs.
The first batch will be calculated from September 21 to October 1.
Changpeng Zhao said that the exchange wants to be fair to all users.
Binance has announced the details of a burn mechanism to burn all trading fees on the Terra Classic spot and margin trading pairs. The exchange made the announcement via a tweet on September 26, with CEO Changpeng Zhao also pointing to a quick thread on what and why it was happening.
The decision comes in response to a community proposal on burning trading fees. The official post by Binance reads,
“In response to the LUNC community proposal on burning trading fees while maintaining a good trading experience for users, Binance will implement a burn mechanism to burn all trading fees on LUNC spot and margin trading pairs by sending them to the LUNC burn address. The specific amount of LUNC to be burned, its equivalent value in USDT, and on-chain transaction ID will be updated each week in this announcement until further notice.”
The first batch of fees to be burned will be calculated from September 21 to October 1. The burn mechanism will not affect BNB fee discounts, fee rebates, or another form of fee adjustment or discount.
The community response wasn’t the most welcoming with the old approach, which had an opt-in feature. Zhao noted that it was decided to move to the new method, described above. He says that “the burn is paid at our expense, not the users.”
Opt-In Feature Saw Some Challenges
The decision to use an opt-in button for the burn tax on Terra Classic set some discussion off earlier last week. Zhao spoke about the whole process during a Twitter AMA, saying that off-chain exchange trades were not part of the deal because it would stop users from trading LUNC on Binance. He said that
“If Binance charged 1.2% per transaction, I don’t think we would burn very much because most LUNC traders would go to other exchanges that don’t have the burn.”
Zhao wants to be fair to the users, in his words, and it still allows Binance to contribute to the decrease in the supply of LUNC. Binance feels like this is the optimum approach to appease all stakeholders.
Meanwhile, amidst all this news, the Terra Classic token price has gone up by a massive 40%. The news has certainly boosted the token, though it’s very possible that it can fall sharply again. Such is the token’s nature now, having gone through the now notorious collapse earlier in the year.