Terra Classic (LUNC) 1.2% Tax Burn To Be Reduced, Here Is Why

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The Terra Classic (LUNA) community is striving to get the attention that the currency deserves and one such move is the 1.2% tax burn. This initiative is currently supported by Binance, world’s largest crypto exchange.

The latest update comes from Terra Classic core developer, Edward Kim where he disclosed about him giving a thumbs up to proposal 5234 which is dedicated to reduce the tax to 0.2%. While 10% of it is distributed to the community pool which the community might use to boost the network’s development. This statement was revealed in a new blog post which was shared by Edward via Twitter.

My thoughts on Terra Classic Proposal 5234 https://t.co/gYpPEejNHJ

— Edward Kim (@edk208) October 14, 2022

Terra Classic’s 0.2% Tax Burn Proposal

The blog post mentions how Edward has simplified the proposal into two categories to give out his decision. Firstly, he talked about channeling 10% of the tax to community pools. He has then explained in post that this will mean burning 100% of tax that is received at the end the said period which is 7 days for LUNC chain. Then he says this will also include mining 10% of it during the start of the new phase.

“A community pool can be used for emergency funds, attracting dApps and projects back to the chain, and paying developers to improve the chain,” wrote Kim. “I vote yes for the 0.9 parameter change.”

Next, the developer analyzes how the move from 1.2% tax to 0.2% is effective. Here firstly he claims that there is no guarantee if there will be any return of on-chain volume if the tax limitation is reduced. He also says that as per the analysis the on-chain volume will not see any upward move anytime soon with the current tax burn limit.

However, finally he notes that there is no guarantee for any results as it’s neither too early to change the tax limitation nor it is too late. Hence, he leaves it on time and gives a yes to the proposal.

“After weighing all the data, reflecting on what I know and recognizing what I don’t know, I voted yes to proposition 5234,”

It is also important to note that Edward Kim was the one who proposed the now 1.2% tax burn initiative for Terra Classic (LUNC)

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