The LUNA Classic Challenge: Burning LUNC

Mathematics and Crypto Synergy - Burning LUNC as a Community

Great news first and foremost, let's talk about LUNA Classic and the ideals of blockchain. If you are anything like me, you hold a belief in the foundational principles of decentralization and immutability.
Perhaps you resonate with what blockchain represents – inclusivity, incentivization, economic development, and the opportunity to build the future while standing at the foothills of a mountain we can barely glimpse the peak of. It's a journey we will eventually embark on, passing the torch to the next advancement in humankind's quest for mutually designed improvement.
We find ourselves still in the early stages of this rapidly expanding technology that transcends the visions of most crypto enthusiasts. This leads us to the community of blockchain and the genuine strengths of our potential as the user base of this technology. We have the power to change the course of losing battles, the industry itself, and bring about changes we deem necessary.
We also have the power to create brighter futures, improve the quality of lives, and through community synergies, reclaim what so many have lost: wealth and an enhanced quality of life.

Why Burn LUNC and How? 

Luna Classic represents an extremely low-cost entry and an easy-to-use asset, providing the opportunity for both new and established investors to reshape the future of an asset while regaining wealth and control without breaking the bank, or making it too costly for everyone to take part.
It's not about making headlines or changing circumstances; it's a commitment to a common goal that the entire blockchain community can achieve together. While you're welcome to suggest other assets, I dare say that LUNC possesses all the qualities necessary to facilitate such a momentous occasion and execute it flawlessly.
All that is needed is for as many users as possible to obtain 100,000 LUNC and set a date for everyone to burn that 100k in LUNA in celebration of community, and resilience. 
This sounds great, right?
Here's the kicker: It's not enough.

It's all about math and supply, right?

We all know the story, the hard fork was a result of a catastrophic collapse of the TerraUSD (UST) stablecoin, which lost its peg to the US dollar and dragged down the value of its sister token, LUNA, by 99%. The new chain, Terra (LUNA2), abandoned the stablecoin mechanism and focused on other use cases, while the old chain, Terra Classic, retained the stablecoin system and rebranded its tokens as LUNC and USTC.
However, the hard fork also created a massive inflation of LUNC supply, which increased from 400 million to over 6.5 trillion in a matter of days. This was due to the algorithmic market module that minted LUNC to balance the supply and demand of USTC. The inflated supply of LUNC made it practically worthless, trading at fractions of a cent. To address this issue, the Terra Classic community implemented a unique burn mechanism that automatically burns a percentage of LUNC tokens whenever a transaction occurs on the network. The burn rate was initially set at 1.2%, but later reduced to 0.2% to encourage more activity on the network. The goal of the burn mechanism is to reduce the circulating supply of LUNC and increase its value over time.
According to LUNCmetrics, a website that tracks LUNC supply and other metrics, the current amount of LUNC in circulation is 5,790,042,548,595, which represents 85.05% of LUNC total supply. LUNC are considered to be out of circulation when LUNC are staked, or when they are stored in the blockchain’s community pool. The website also shows that the total amount of LUNC burned so far is 1,016,957,451,405, which represents 14.95% of LUNC total supply. The burn rate has been fluctuating between 0.2% and 0.5%, depending on the network activity and the community governance.
One of the factors that influence the network activity and the LUNC burn is the number of active wallets that hold LUNC. According to CoinMarketCap, there were 11,839 active wallet addresses for LUNC, as of 5 October 2022, up 12.76% from 10,499 on 8 July. The data further suggests that the top 10 holders control 12.47% of the current LUNC supply, whereas the top 50 and top 100 holders control 25.88% and 34.57%, respectively. This indicates that the LUNC distribution is relatively concentrated among a few large holders, who have the potential to influence the LUNC price and burn by their actions.
To illustrate this point, let us assume my hypothetical scenario plays out, where all active wallets decide to burn 100,000 LUNC each. This would result in a total of 1,183,900,000 LUNC being burned, which is equivalent to 0.017% of the current LUNC supply. This would also trigger the network’s burn mechanism, which would burn an additional 0.2% of the transaction amount, or 2,367,800 LUNC. Therefore, the total amount of LUNC burned in this scenario would be 1,186,267,800 LUNC, which is equivalent to 0.0174% of the current LUNC supply. This would reduce the circulating supply of LUNC to 5,788,856,280,795, which is equivalent to 84.99% of LUNC total supply. The LUNC price would only increase slightly, perhaps 7-10% as a result of the reduced supply and increased demand.
Of course, this scenario is very unlikely to happen, as it would require a high level of coordination and cooperation among all active wallets, as well as a strong incentive to burn LUNC.

Let's say hypothetically that everyone burns 1 million LUNC? What would happen then?

The total supply of LUNA CLASSIC would be approximately 5.785 trillion after burning 1,000,000 tokens from each of the 5,000 active wallets. This would reduce the total supply by only about 00.09 - 00.10%, respectfully. Which even with the burning mechanism behind it, burning even 1,000,000 per wallet would have very little impact on the price. Unfortunately, the entry costs for this would be impractical and would be impossible for many users to take part.
While the idea of a super burn event sounds great, on the flipside it wouldn't do much for holders. The burning mechanism itself has done more for LUNC in terms of reducing the overall number, with 14% already burnt away. Thats more than any community event for LUNC. Even if there was a monthly burn event, or yearly, it would have little real impact.

Practical Ways to Burn LUNC

Often enough, some community members of LUNC and even other projects try to dream up other ways to burn tokens, but fall short finding adoption beyond the centralized community, and its initiatives. 
Ideas range from subscription services, to side by side economic development with other projects, and funding other ideas that could lead to more burning of LUNC. Practicality though is the major hurdle, and these initiatives although great and smart ideas, still may have little impact. The point is though, combined together as a formidable ecosystem that encourages use and helps drive the burn of LUNC, it is slowly eroding away at that 5T+ in circulation.
In October of 2023, an estimated 74.6 billion LUNC had been burnt. This number has since increased from October, with an estimated 105b burned since starting with the initial burn announcement, with an average burn rate expected to maintain a 95-100 million LUNC per day in influx. 
There exists though many community driven ideas that have taken shape, like LUNC Burn Flip, and others that help drive some extra LUNC burning, but even these only do a small amount of damage to the number of LUNC in circulation.

Best Practice Wins with High Risk Investments like LUNC

Ideally the long-term approach is likely the best practice for investors looking to hook up with LUNC. While I recommend DYOR, and consulting a licensed financial advisor, before investing in anything I write about. As this content is not intended as financial advice, and I am not a financial advisor. Everything you've just read is meant as entertainment and informational purposes only, and should never be confused with actual financial advice or recommendation.
That said, you should look into the return rates for staking LUNC, and examine the average 15% APY found on a number of staking platforms, including directly from the Trust Wallet App. As far as my own approach, staking for the longterm makes the most sense, and I have staked my fair share for the long-term.
Staking actually keeps the supply locked down, and helps create demand, as 100s of Billions of LUNC are currently staked across multiple platforms. Thus removing a considerable amount from the circulating supply, effectively "burning" LUNC temporarily, as long as it's locked as a stake.
With other platforms like Binance, and other projects contributing towards burning LUNC, time will tell how LUNA Classic will reevaluate in the future, and while haters will hate, LUNC is still a prospect for intelligent investors who understand the underlying principles of Blockchain and the industry.

Disclaimer:

The content presented here is intended for informational purposes only and does not constitute financial, investment, or legal advice. The author is not a financial advisor or legal professional. Any actions taken based on the information provided are at the sole discretion of the reader.
For transparency and clarity, the author discloses that they hold LUNA CLASSIC tokens. This ownership may influence the author's perspective, and readers are urged to conduct their own research and seek professional advice before making any financial or investment decisions.
The author endeavors to provide accurate and up-to-date information, but there is no guarantee of its completeness or accuracy. The author shall not be held responsible for any errors, omissions, or losses arising from the use of this information.
Engaging with the content implies acceptance of these terms and the acknowledgment that the author's views are personal and subject to change. Readers are encouraged to verify information independently and consult with qualified professionals regarding their individual circumstances.
Thank you for reading 📚