Exchange Ranking
Top Exchanges
24h Volume Ranking
Popularity Ranking
Exchange BTC Balance
Proof of Reserves
Decentralized Exchanges
Funding Rate
Funding Heatmap
Liquidation Data
Max Pain
Long/Short Ratio
Whale L/S Ratio
Binance/Okex/Huobi L/S
Bitfinex Margin L/S
ETF Tracker
Solana ETF
XRP ETF
Hong Kong ETF
Bitcoin Treasuries
Crypto Reversal
Ethereum Reserves
HyperLiquid Wallet Analysis
Hyperliquid Whale Watch
Large Transactions
On-chain Movement
Bitcoin ROI
Stablecoin Market Cap
Options Analysis
News
Articles
Economic Calendar
Features
Wallet
Contract Calculator
Security
Collections
Watchlist
Following
LUNC Today, Terra Classic's circulation supply is close to 5.5 trillion coins, and almost all of these coins will not exist until the week of May 2022.
How the Death Spiral forged trillions of tokens
The Terra protocol allows anyone to convert 1UST (its algorithmic stablecoin pegged to the dollar) into a $1 worth of LUNA at any price. This mechanism is simple and straightforward in a calm market, but it can be fatal under pressure: as the LUNA price falls, an increasing number of new coins are minted for every dollar exchanged.
The run began on May 7, 2022. At that time, the two addresses withdrew 375 million UST from the Anchor loan agreement-which had provided an annualized rate of return of about 20% on about three-quarters of the total UST supply. When a few large UST holders adjusted their positions on May 7, 2022, other large players followed suit. Blockchain technology allows investors to monitor each other's actions in real time, accelerating the spread of runs.
Numbers quickly became cruel. When LUNA fell to $0.10, 10 new tokens were generated for every dollar exchanged; when LUNA fell to $0.01, 100 new tokens were generated for every dollar exchanged. In the end, in just 72 hours, the circulating supply of LUNC surged from less than 400 million to more than 6.5 trillion. UST plummeted from US$1 to US$0.01, and LUNA tokens fell from US$80 to almost zero, expanding the supply by about 20,000 times.
During periods of extreme market volatility, this system forms a death spiral. When UST unanchors, arbitrageurs burn UST to minte LUNA, causing the supply of LUNA to increase and the price to fall, forming a negative feedback loop that ultimately destroyed the value of both tokens at the same time.
The status quo that the burn tax fights
The original chain is retained, but is renamed Terra Luna Classic, and its original token is renamed LUNC. It is these trillions of tokens that communities are facing now, and the burn tax is designed to combat this situation.
The community passed Governance Proposal #12223 to increase the on-chain transaction combustion tax to 1.5%, effective August 2, 2026. Among them, 1.2% was permanently destroyed, 0.15% went into the community pool, and 0.15% went into the oracle pool.
In August alone, more than 2.04 billion LUNCs were destroyed, bringing the cumulative destruction in history to exceed 455 billion. This is progress, but the scale of the problem remains severe: with a supply of 5.52 trillion pieces in circulation, the current burning rate can only reduce the supply by about 0.6% per year, which means that continued high transaction volume is important to have a substantial impact.
At this rate of burning, it will take decades to reach the level of supply desired by some community members (typically 10 billion or less), underscoring the long-term nature of deflationary strategies.
