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- Terra Luna Classic has made a strategic move to optimize its burn tax.
- With network efficiency in mind, community sentiment is heightened with an uptick in price.
The Terra Luna Classic (LUNC) is seen to be undergoing notable changes following an approval to revise the cryptocurrency’s burn tax. The changes include a favorable vote for an oracle pool distribution from the Terra Luna Classic community.
Terra Luna Classic Burn Tax Proposal Approved
Recent reports reveal the Terra Luna Classic community successfully passed Proposal 12098 titled “Changing the Reward Share Distribution of the Burn Tax.” The proposal aims to alter the burn tax distribution to the community and Oracle pool. However, it is important to note that the proposal does not alter the burn tax rate, nor the amount sent to burn.
At the moment, the proposal has gained 70% favorable votes, with 37 validators in support of the proposal. The essence of the proposal lies in its redistribution mechanism, which diverts a portion of the burn tax revenue away from immediate rewards and into the long-term staking incentives facilitated by the Oracle pool.
According to recent information, Terra Classic operates with a burn tax set at 0.5%. Under the distribution model, 80% of this tax is directed towards burn, with the remaining 20% shared evenly between the Community Pool and block rewards.
However, with the approval of Proposal 12098, this distribution structure changes. Now, the 20% share designated for rewards will be divided equally between the Community Pool and the Oracle Pool.
This adjustment demonstrates the resilience of the Terra Luna Classic ecosystem. The community aims to strengthen long-term staking incentives and increase network participation and stability.
One notable consequence of the revised distribution model is its potential impact on the Annual Percentage Rate (APR) for staking participants. With changes in the allocation of rewards towards the Oracle pool, the APR may experience a marginal decrease of approximately 0.5%. This decrease is, however, dependent upon on-chain volumes.
The timing of this proposal coincides with the anticipation surrounding crypto options expiry, valued at $9.4 billion. It also comes only shortly after the introduction of Proposal 12097 which would also increase validators’ commission from 0% to 2.5%, as previously reported by Crypto News Flash.
Impact of Proposal 12098 on LUNC
Recent market trends indicate a bullish sentiment, with LUNC gaining momentum for further recovery amidst prevailing selling pressure across the crypto market.
At the time of writing, LUNC is trading at $0.0001074, representing an increase of 4.7% in the past 24 hours. The market capitalization also increased by 4.7% to $623 million, while trading volume demonstrated a remarkable 58% increase to 54 million.
In a similar move, its associated stablcoin, TerraClassicUSD (USTC) is also showing signs of recovery, trading at $0.01884. The market capitalization and trading volumes have increased by 2.8 and 8.6% to $168 million and $24 million respectively.
