After being trapped in a month-long ordeal, Terra ecosystem forked to introduce LUNA 2.0 and LUNA Classic. However, the crash of LUNA kept many away from this new project, and rightly so. The skepticism is high about the tokens and Terra as a whole. In fact, the Terra whistleblower, FatMan, believes that the LUNC token valued at $0.00006012 at press time, will never hit $0.01 despite the burning mechanism in place.
Terra 2.0 went live just three weeks back and the LUNC holders have been trying to push the value of the asset up to $0.01. However, given the current price bearishness clubbed with the growing skepticism about failed and cheated crypto projects, LUNC may not rally to the expected value.
FatMan pointed out that even the burns will not help LUNC to reach $0.01. He explained in the following example why Binance burning its entire LUNC [which is equal to 2.17 trillion] wallet, will also not be enough for the asset to meet the $0.01 price level.
“Assume Binance burns their entire 2.17T (2,170,000M) LUNC wallet, a bigger burn than all of the proposals, bringing the supply down to 4.37T.
A $0.01 LUNC will require a $43.7b market cap – 109.25x higher than the current market cap
Not possible IMO”
As pointed out by the whistleblower, LUNC will need a $40 billion market cap to achieve the price point which currently seems like a far-fetched dream. Why?
It’s fairly straightforward. The LUNC on-chain volume is negligible at press time. Additionally, there was no real demand for the token since there is a lack of utility. Any new crypto token requires usability to ensure adoption, but with Terra’s history, it will be an uphill battle.
Data from CoinMarketCap highlighted the number of holders for the digital asset has remained low at 10,322- these were the total number of unique addresses that hold LUNC on the Terra network.
With the project struggling to gain adoption and interest from crypto users, there was no reason for major exchanges to support it. Once again, the Terra LUNA crash proved to be detrimental not just for users but also for exchanges, therefore, the risk of adding a controversial token will be something to avoid.
As explained earlier by FatMan, the hypothetical Binance burn will still keep the price lower than the expected value. Therefore, it will not be viable for major exchanges to support LUNC burns.
FatMan concluded,
“The people telling you that you can ‘burn’ a coin with no product and push it to a higher all-time high market cap than LUNA at its peak are lying to you.
They are feeding you with irresponsible false hope and it does far more harm than good. Be rational about your positions.”