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- The Terra Classic (LUNC) community has introduced a “Reverse Charge” tax mechanism, simplifying transaction taxes by deducting them directly from the transaction amount.
- In addition to ongoing burn efforts, Terra Classic’s recent tax reforms and community initiatives aim to support the network’s growth.
Binance recently executed its 27th burn of Terra Luna Classic (LUNC) tokens, removing 1.048 billion LUNC from circulation. This burn on Friday, November 1 aligns with Binance’s established monthly LUNC burn program and includes tax costs amounting to 5.2 million LUNC.
About Binance’s Latest LUNC Burn
As part of this latest burn, Binance eliminated approximately $95,073.99 in trading fees accumulated from LUNC spot and margin transactions during the period between September 30 and October 30. To date, Binance’s total LUNC burn has reached nearly 66.66 billion tokens, per the CNF report.
This token burn mechanism has been a significant element in Binance’s support for the Terra Classic community. It aims to reduce the circulating supply of Terra Luna Classic and potentially boost the LUNC price. Binance burns 50% of the LUNC fees generated from trading activities, with the previous burn batch totaling around 1.14 billion LUNC.
The Terra Classic community has now burned almost 137 billion LUNC tokens. Moreover, the Terra Classic price is surging in response to these efforts. At press time, the LUNC price was up by 4.78% to $0.00008539 on Monday, November 4.
As Terra Classic pushes forward with initiatives to reduce the LUNC supply, community members are also closely watching developments around Terraform Labs’ bankruptcy proceedings. They are hopeful that these could lead to further LUNC and TerraClassicUSD (USTC) burns under the court’s oversight.
New Tax Proposal
In a parallel development, the Terra Luna Classic community recently approved an important proposal aimed at reforming the tax system within the Terra Classic blockchain, reported CNF. Known as the “Reverse Charge” mechanism, this new proposal streamlines how taxes are deducted in LUNC transactions. Thus, it has introduced changes intended to simplify the tax process for both developers and users.
Instead of requiring senders to pay an additional tax amount, the Reverse Charge system deducts taxes directly from the transaction total before funds reach the recipient’s wallet. This move removes the need for developers to build complex tax-handling features into their applications.
The Reverse Charge system also seeks to eliminate double taxation issues that have affected smart contract transactions on Terra Classic. Under the previous model, both sending and receiving smart contract transactions could incur taxes. This complicated financial management for dApps and adding an extra layer of cost.
Thus, the new tax approach ensures that taxes are only applied when funds exit a contract and enter a wallet. This indeed simplifies the process, especially for developers adapting applications from other blockchain networks, reported CNF.
The change also allows for backward compatibility. This means that developers who still prefer the sender-side taxation model can continue to use it if desired. This flexibility, combined with the streamlined tax handling of the Reverse Charge system, is expected to make Terra Classic a more accessible platform for new dApps from other networks.
