Binance once burned 100 percent of all Terra Classic (LUNC) spot and margin trading fees. This move helped reduce the total supply of LUNC and supported the community’s goal of restoring value to the token.
Later, Binance adjusted its policy and decided to burn only 50 percent of trading fees. This change was made after two key governance proposals, Proposal 10983 and Proposal 11111, reshaped how burn and remint mechanisms worked within the Terra Classic network.
Proposal 10983
This proposal suggested increasing the RewardPolicy rate_min from 0.1 to 0.5. The change meant that half of all LUNC burned during each epoch would be reminted into the community pool. The intention was to accelerate ecosystem funding and help rebuild Terra Classic’s infrastructure.
Under this proposal, the community pool could grow up to four times faster, allowing more capital for developer initiatives and long term projects.
Proposal 11111
Proposal 11111 aimed to reverse the previous decision. Many community members opposed reminting 50 percent of the burned LUNC, arguing that it undermined the purpose of the burn movement and discouraged long term supporters.
The proposal restored the burn tax to 0.2 percent and limited reminting to just 10 percent of burned tokens, aligning the policy closer to the community’s original vision.
Why Binance Changed Its Burn Policy
Following these governance changes, Binance reduced its burn contribution starting in December 2022. The exchange shifted from burning 100 percent to 50 percent of LUNC spot and margin trading fees.
Binance made this decision after the community chose to remint part of the already burned LUNC into the community pool, a move that went against the original intent of Binance’s burn support.
Conclusion
Binance’s decision to reduce its burn rate reflected its commitment to transparency and principle. The exchange had initially pledged to permanently remove burned LUNC from circulation, but when the community decided to remint a portion of those tokens, Binance adjusted its policy.
By continuing to burn 50 percent of LUNC trading fees, Binance reaffirmed its support for Terra Classic’s revival while maintaining a responsible and transparent approach to its contribution.
