Is Coinbase Afraid of Listing Luna Classic?
The Luna Classic community have managed to get the hashtags #CoinbaseListLunc and #Coinbase to trend on Twitter for over five days. In fact, these hashtags have had in excess of 100K tweets a few days ago.
Despite this overwhelming effort by the Lunatics, I have yet to hear any response from Coinbase.
Could they be scared of the Lunatics?
There has been total silence on the part of Coinbase, while Twitter is on fire with Coinbase/Lunc images. We’re talking about Luna Classic — the hottest Layer 1 token in the market and not a response from Coinbase!
It has only been a little over a week since Binance had to finally cave-in to the stormy boycott campaign from the Luna Classic base for not accepting to implement the latter’s 1.2% tax/burn proposal; a campaign, which is largely attributed to getting CZ of Binance to relent.
Thus, I can only think of three reasons why Coinbase might be hesitant to pronounce anything around Luna Classic without first taking full consideration of the risks involved:
They have not decided whether relisting Luna Classic would be beneficial to the exchange, in light of the ongoing plan to repeg USTC.;
They have yet to decide on how to deal with the 1.2% tax burn initiative technically and politically;
They do not want to face the wrath of the Lunatics should they reveal a plan that does not meet with the approval of the community.
Let me further expand on the above:
Question 1: Benefit to the Coinbase in the face of USTC Re-peg
Re-listing Luna Classic on any major exchange in the US must be considered within the scope of the latest crypto legislation being discussed in the United States by the House Financial Services Committee. Unlike other cryptos, Luna Classic is considered by many to be the catalyst for the recent crypto market collapse in May, triggered by the depeg of its algorithmic token, UST (now USTC). According to an article by PYMTS, this legislative proposal seeks to place a 2 year moratorium on any algorithmic stable coin which is not strictly collateralized by cash or liquid assets.
As detailed by the Terra Rebels’s Burn and Rebuild Luna Classic proposal released by the team leader, Edward Kim on his Medium page, the plan to repeg the USTC will only happen if and when the token obtains sufficient community-based financing to pay off the outstanding $10 Billion debt caused by the USTC depeg. According to the proposal, “The repeg team, lead by Forshaw, are working on a significantly strengthened capital control system to dramatically reduce the odds of another death spiral.”
Thus, I am sure that Coinbase is seriously considering its legal and social options before deciding on the re-listing of Luna Classic.
Question 2: No decision on how to deal with the 1.2% tax/burn initiative
Every exchange that seeks to list Luna Classic must decide upfront how they will implement the tax/burn initiative. In the wake of Binance’s fumble, it is very clear that all exchanges have had to reconsider their plans. They can either decide to implement the tax/burn proposal directly on the exchange and risk the chance of driving whale traders away or they can utilize Binance’s model and pay for the burn using their trading fees.
Most exchanges would not take either approach. Instead, they would go for the tax on withdrawals and deposits instead. This third option seems to be the most probable route for Coinbase’s listing of Luna Classic in the short run, considering they have decided to take the risk that the repegging of USTC would not negatively impact the stability of the token in the long run.
Question 3: Coinbase does not want to rattle the cage of the Luna Classic community.
Seeing how CZ, the CEO of Binance, the world’s largest crypto exchange, was forced to capitulate to the demands of the Lunatic community in the wake of its mis-management of the tax/bun implementation, Coinbase might just be getting cold feet. Walking down the aisle with the Lunatic community is a risky proposition Coinbase must be thinking twice about.
However, let me assuage your fear Coinbase:
We’re neither “too bold” or “demanding” as the Artist formerly known as Prince would say. We, the Lunatics, just want to be treated with respect, especially after everything we’ve accomplished after the fall of Terra Luna!
Finally, there is one last consideration Coinbase must be undertaking as well. This is the fact that the Luna Classic token remains the hottest crypto in the market. According to a recent article by Decrypt.com,“The value of Luna Classic, LUNC, is up over 70% for the week and up over 44% for the month, hitting $0.000365 mid Sunday as traders awaited final token burn numbers from Binance.” All this, while Bitcoin, Ethereum and other cryptos remain stagnant!
There is no denying that Luna Classic is generating lots of revenues for the exchanges. Passing up on these trading fees is not easy, especially when the overall market volume is down across the board, while Luna Classic continues to post increasing trading activities.
Market Trading Volume, Courtesey of The Block
Price and Volume Chart, Courtesy of Tradingview
In the end, neither the fear of the Lunatics community nor the pending legislation on algorithmic tokens will deter Coinbase from relisting Luna Classic.
I predict that Coinbase will relist Luna Classic token on the basis of the token’s credibility, volume, and revenue generating potential and not on the insistence of the Luna Classic community, though the pressure from the latter helps. After all, Coinbase, as the largest US crypto exchange, has missed out on lots of revenues as a result of delisting Luna Classic. And, the promise of wealth is far more enticing than the fear of potential loss.
In compliance with the financial disclosure requirements, I must inform you that I am not an investment advisor. This article is for information only. Furthermore, I own Luna, including units which I purchased before and after the UST/USD depeg.