Terraform Labs founder and CEO Do Kwon, has finally succumbed to the community pressure. He has recently shared a burn address for LUNA, which obviously contradicts his initial plan.
The recent Terra revival plan announced by Do Kwon received mixed reactions as many questioned the viability of a hard fork in reviving Terra (LUNA) and TerraUSD (UST) tokens.
Instead of adopting Kwon’s suggestion, a larger part of the community demanded a massive LUNA token burn. Even the CEO of Binance, Chanpeng Zhao (CZ), has issues with forking the blockchain. According to CZ, hard forking cannot bring back the vanished value. However, he also supports the community members that want LUNA token burns.
“Reducing supply should be done via burn, not fork at an old date, and abandon everyone who tried to rescue the coin.”
Upon a persistent request from the crypto community, Kwon went against his initial plan and publicly shared a burn address for LUNA on the 21st of May. Every LUNA token sent to this address will be burned immediately, effectively reducing the circulating supply of LUNA tokens.
Do Kwon Warns: Burning LUNA Tokens Will Not Boost Its Price
Two days after sharing the LUNA burn address, Kwon took to Twitter to reiterate his viewpoint that reducing the circulating supply of LUNA tokens will have no impact on the market price.
After sharing the LUNA burn address on the 21st of May, he said it was shared only for information purposes and warned against sending their tokens to the address.
Do Kwon wrote, “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.”
In a recent tweet, he sounded a similar note of warning, “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.”
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 https://t.co/GrzG9cclAr
— Do Kwon 🌕 (@stablekwon) May 23, 2022
It should be noted that the revelation has resulted in more confusion among investors since Kwon has previously confirmed that Terra is no longer minting new LUNA tokens, which is one of the major reasons why investors believe a burning mechanism will improve LUNA price owing to scarcity.
Amid an unclear roadmap for a lasting solution, investors are advised to refrain from making abrupt financial decisions as the master plan for Terra revival continues to be under public scrutiny.