On CoinMarketCap, at the time of writing, Terra Luna is trading at $3.91 down by 18.6% in 24 hours. The token has touched an intraday high and low of $4.86 and $3.85 respectively. Its market cap is currently around $499.5 million. However, the trading volumes picked up by 11.6% in 24 hours and were around $1.56 billion.
Yesterday's change in Luna tokens was lower by 30.5%.
Last week, Luna was the 58th largest cryptocurrency on CoinMarketCap with a market cap of more than $3 billion. Currently, the token dropped 16 places to become the 74th largest crypto.
However, compared to its all-time low of $1.53 recorded on August 29 this year, the token has gained by nearly 167% as of today. Its weekly upside is over 100%.
The hype in Terra tokens
The rise in Terra tokens comes after the proposal of tax burn in Terra Classic Lunc.
Terra plans a 1.2% tax burn for on-chain transactions of LUNC and USTC on the Terra Classic network. These proposals are being developed to change the tax parameter from its current value of 0 to 0.012 (1.2%). It has received approval for the same. Many cryptocurrency exchanges are supporting the tax burn plan.
According to Terra governance, the 1.2% tax will be applicable on all currency denominations currently available on-chain, including LUNC and USTC.
Terra's 1.2% tax burn goes live on September 20 at the Terra Classic block height of 9,475,200 after the proposal is submitted.
Amidst the flash crash of Terra USD and old Luna, in May this year, Terraform Labs co-founder Do Kwon launched Terra 2.0, under which, the original Terra chain has been rebranded as Terra Classic. While a new chain called Luna was created with the existing name Terra and made available for trading.
Following the launch of Terra 2.0, the new Luna touched an all-time high of $19.54 on May 28. However, since then, the token is trading lower by over 79% currently.
What to expect in Terra tokens ahead?
Vinit Khandare, CEO and Founder, MyFundBazaar said, "Being on the cusp of a major breakthrough, the Terra Classic has sparked a debate in the cryptocurrency community, ever since the market crash in May. Moreover, this collapse in early 2022 led to a precipitous decline in the security of digital transactions - sending shockwaves through the industry, ushering in a “crypto winter" that was particularly challenging for cryptocurrency investors."
Khandare explained that while all on-chain LUNC transactions will be subjected to a 1.2% tax which includes wallet and smart contract interactions since Terra Classic re-enabled staking earlier this year, which large holders and validators have been taking advantage of its outsized staking rewards.
"These early stakers now have fully-loaded bags ready to dump on new investors who are convinced in formulating Luna Classic’s upcoming token burn that will shrink the supply and send it to a dollar," he added.
Further, Khandare added, "Ultimately, Luna Classic has little fundamental reason to be valued as highly as it is, even at fractions of a cent. There’s no reason for serious developers to start building on the chain, and those currently involved seem to view it more as a hobby than a serious investment. Of course, this doesn’t mean LUNC can’t go parabolic again, but it can just as easily plummet when those pumping up the price decide to jump ship : LUNC’s price being in a highly volatile zone with a crunch to be expected soon."
