Earlier this month, the crypto industry suffered a huge setback after Terra’s algorithmic stablecoin UST depegged from the US dollar and caused LUNA to lose 99.9% of its value.
Shortly after the crash, Terraform Labs’ CEO Do Kwon proposed a revival plan for the Terra ecosystem. It centered on forking the current chain, abandoning UST, and creating a new token that will be distributed to investors based on the losses they incurred during the catastrophic event.
Do Kwon Shares Burn Address
The proposal was met with skepticism from members of the crypto community who suggested that Terra should burn LUNA instead to reduce the circulating supply of the asset.
As the pressure from the community continued to mount, with the hashtag #LunaBurn trending on Twitter, Kwon decided to satisfy the wishes of the people on Saturday, May 21.
He shared a burn address for LUNA, which would automatically burn any LUNA token sent to it and effectively reduce the circulating supply in the market.
Do Kwon Makes U-Turn
Interestingly, Kwon tweeted two days later that sending LUNA tokens to the burn address he had sent earlier will do nothing to improve the state of the digital asset. He then advised LUNAtics (the nickname for LUNA investors) not to send their tokens as they will only lose them.
“To clarify, as I’ve noted multiple times I dont think sending tokens to this address to burn tokens is a good idea – nothing happens except that you lose your tokens. Want there to be no confusion whatsoever,” Kwon said.
Despite claiming that he didn’t want to create confusion, publicly sharing a burn address and advising against sending tokens to the burn address two days later had already created confusion. Pointing this out, one user asked Kwon why he had shared the burn address in the first place since he claimed it was pointless.
He replied, saying:
People kept asking for the burn address – happy to provide for information purposes but want to clarify that you should not burn tokens unless you know what you are doing – i for one cannot understand
— Do Kwon (@stablekwon) May 23, 2022
MEXC Pushes Forward With LUNA Burn Plans
Meanwhile, Singapore-based crypto exchange MEXC Global plans to initiate a LUNA buyback and subsequent burn. The exchange intends to use the fees generated from LUNA/USDT spot trades to purchase LUNA in the secondary market, which will then be burned. However, the execution of the plan will be determined by the outcome of community votes.
“MEXC is delighted to offer a special recovery plan dedicated to the LUNA community. We need your decision in deciding whether we should buy back LUNA and proceed with LUNA burn in order to decrease LUNA circulation on the market,” the exchange said.