Last Tuesday, the Terra community was informed of a widely accepted proposal to burn 88.7 million LUNA coins.
At current prices, that amount is worth about $4.5 billion.
The proposal also includes minting a $4-5 million stablecoin (called UST) to give the Terra project an extra boost.
Terra, according toDeFi Llama’, the fourth largest smart contract platform with a total locked value (TVL) of $10.89 billion.
The LUNA coin is part of an algorithmic balancing system that ensures that Terra stablecoins are pegged 1:1 to fiat currencies.
On Tuesday night, Terra permanently removed 520,000 LUNA coins from circulation.
The rest of the cryptocurrency is scheduled to burn over the next two weeks.
At press time, the digital currency “LUNA” is trading at $48.5, down 4.5 percent in the past 24 hours.
Prior to that, the digital currency “LUNA” reached an all-time high of $54.95 on Wednesday around 11 a.m. ET.
“Terra” launches the “LUNA” digital coin burning feature:
The crypto-currency burning mechanism was launched by Terra co-founder Do Kwon.
Burning aims to provide financial support for new services on the stablecoin payments platform.
Ryan Watkins, a research analyst at Messari, said a large portion of the incineration funds — $1 million and more — would go toward investing a new insurance protocol for the Terra ecosystem called ozone.
This is an important part of the ecosystem that should promote more safety for users.
Recently, the DeFi industry has been plagued by an increasing number of cyber attacks.
The Rekt database recently revealed that there have been more than 50 hacks on DeFi protocols in the past two years.
What’s more, these protocols have lost about $1.7 billion due to DeFi exploits in the past five years.
These are some of the issues Terra hopes to solve with its new “Ozone” feature.
More benefits from recent burns:
Kwon noted that the burning mechanism will reduce the amount of wealth in the Terra community pool.
I think the community money should be big enough to pay for public services.
…but DAO [منظمة مستقلة لامركزية] You don’t need billions of dollars to function.
What if Grayscale was an ETF… how would it rank globally?
“Chainlink” co-founder: I expect the momentum to return to DeFi, this time through banks