The Terra Luna Classic community has come to a conclusion regarding the LUNC burn tax after denying many previous proposals related to increasing the rate. With the LUNC price falling below $0.000010 last week, the community finally agreed to raise the burn tax. However, it’s important to note that this decision comes after reaching levels comparable to last May when the TerraUSD (UST) and LUNA prices saw a tremendous collapse.
Speculation regarding proposals in June to restore the LUNC burn tax to its initial 1.2% level has been brought up by some Terra Classic influencers. Nevertheless, the community might have to convince Binance CEO “CZ” before making these decisions, since Binance warned that it might revoke its LUNC burn mechanism.
As of now, the parameter change proposal 11515 “Increase the Burn tax to 0.5%” is up for voting, aiming to steer the community’s focus towards reducing the LUNC supply by increasing the burn tax, just as they do for staking to boost LUNC demand. The proposal has thus far gathered 77% of votes in favor, with 20% “No”’ and 3% “No with veto.” A few more days are left to pass the quorum and threshold.
Major validators have pledged support for increasing the burn tax to 0.5%, including TCB, StakeBin, JESUSisLORD, Moonshot, Classy’s Sphere, and others. Out of the 28 validators who voted, 17 are in favor, 6 are against, and 5 have chosen to abstain from voting.
Some observers hold the belief that the burn tax should be permanently raised to the original 1.2%, as introduced by core developer Edward Kim. They argue Binance will ultimately agree, since the burn tax was not the reason for them decreasing the LUNC spot and margin trading fees contribution to 50%. Rather, it was Proposal 10983 to contribute funds from burn tax to the community pool.
A likely consequence of increasing the burn tax would be an overall rise in Binance LUNC burns and LUNC burn rate. Recently, a new project managed to burn 1.5 billion LUNC tokens within just two weeks, a significantly larger amount than Binance’s 1.2 billion LUNC burn within a month.
At the time of writing, the LUNC price presently trades at $0.00008917, down 1% in the last 24 hours. The 24-hour low and high stand at $0.000087 and $0.000091, respectively.
It is crucial to take note of market conditions and conduct thorough research before investing in cryptocurrencies, as the author’s opinions may vary.
Source: Coingape
