There is nothing quite as stimulating as decreasing supply. Certainly that’s the intention. Terra voted to burn a large percentage of her tokens due to that reason. Burning LUNA will burn 89 million tokens (roughly $4.5 billion) in the Terra team’s decision. Following the proposal put forward by Terra co-founder Do Kwon, the token’s price shot up from $50 to over $54, exceeding its all-time high of $54.77.
From the below tweet we can see the team decison.
1/ The on-chain votes for proposals 133 and 134 to burn the 88.675 million Pre-Col-5 $LUNA in the Community Pool (~$4.5 billion), swapping for $UST using the on-chain swap, and reducing the oracle_rewards_pool distribution window from 3 to 2 years have now passed!— Terra (UST) 🌍 Powered by LUNA 🌕 (@terra_money) November 10, 2021
As a result of the successful vote, 520,000 LUNA (worth over $25 million) were withdrawn from circulation, with the remainder of 88+ million to be burned over the next two weeks, theoretically increasing LUNA’s value. Hence, the team used burn LUNA to proceed. From the graph below, we can see that the LUNA burn was high in these 2 weeks, November 8-20, 2021.
According to the below graph, the most Luna(USD) has been burned in the weeks of Nov 8-21, 2021. These events resulted from team decisions. According to LUNA’s founders, this proposal may increase the price of LUNA.
As shown in the above analysis, NOV 8-21,2022 was the high volume burning week for LUNA. This was especially evident after the burning of LUNA occurred, since the LUNA price has been increasing. Thus, in my opinion, the intentions of the Terra market ecosystem were achieved. Hence they achieved their goal as there is nothing quite as stimulating as decreasing supply through burning LUNA.