- Terra Luna Classic community debates raising the burn tax rate from 0.5% to 1.5%.
- If increased, the burn tax would triple contributions to the community and oracle pools.
Members of the Terra Luna Classic (LUNC) community are currently debating a proposal to raise the burn tax rate from 0.5% to 1.5%. This proposal, presented by Terra Classic validator JesusisLord, seeks to raise the on-chain tax rate. The proposed change involves keeping the burn tax rate as it is today until the total LUNC supply reaches 10 billion tokens, a threshold set during the initial burn tax mechanism integration.
Under the current system, the 0. 5% burn tax is divided into two parts: 80% is directed towards the burn mechanism, and the remaining 20% is split between the community and oracle pools. Precisely, the 20% distribution is split between the community pool at 10% and the oracle pool at 10%. The previous v3. 1. 3 upgrade has made sure that the Oracle pool gets its due 10% of the burn tax.
Proposed Tax Hike Triples Burn Rate
If the burn tax is increased to the level of 1.5%, then the burn tax allocation will increase from 0.4% to 1.2%. This adjustment would effectively triple the contribution rates to both the community pool and the oracle pool. The rise in the burning tax is expected to quicken the pace of burning LUNC and USTC tokens, as well as increase funding for the community pool and the oracle pool, which supports long-term staking rewards.
According to Validator JesusisLord, this will result in a significant upswing in the rate of token burn, thus boosting the financial backing for community projects and the staking rewards. However, this proposal will go to the governance voting only if the Tax2Gas mechanism can be successfully deployed on-chain. The core developer of Tax2Gas Genuine Labs has estimated that the software will be up and running by August.
LUNC and USTC Prices React to Burn Tax Proposal
The public has been divided on the burn tax proposal. The price of LUNC declined by 3% in the last 24 hours and was trading at $0.00008043. The lowest and highest prices for this period were $0. 0000807 and $0. 0000843, respectively. Also, trading volume has declined by 21% in the last one day.
Also, USTC fluctuated and reduced its price by 3.72%, and it traded at $0. 01894. USTC was trading at $0. 01878 at its lowest and $0. 01985 at its highest within the 24-hour period, with trading volume decreasing by 6% in the same period.
The community’s opinions on the possible advantages and disadvantages of raising the burn tax rate are still split. There are fears that large exchanges like Binance may halt the LUNC burn mechanism if the tax rate is raised. This has created some controversy over the proposal, as the potential benefits of a higher burn tax are considered against the potential decline in exchange support. As the discussion goes on, the Terra Luna Classic community is still paying attention to the changes made regarding Tax2Gas and the change in the burn tax proposal.
