Terra Luna Community Votes on Increasing Burn Tax from 0.5% to 1.5%
The Terra Luna community is voting on a proposal to raise the burn tax from 0.5% to 1.5%. This adjustment aims to reduce the supply of LUNA Classic #LUNC and #USTC tokens, potentially increasing their prices and funding community projects.
The voting is based on proposal 12149, “Set On-Chain Tax Rate to 1.5%,” which proposes raising the on-chain tax rate to 1.5%. This rate will remain unless the total supply of LUNC reaches 10 billion.
The current 0.5% LUNC burn tax is split into 80% for burning tokens and 20% for community and oracle pools. If approved, the new tax structure will allocate 1.2% to burning tokens and 0.3% to the Community and Oracle Pools, enhancing funds for ecosystem growth.
Community Division Over Proposed Tax Increase
The community exhibits division regarding the proposed increase. Notable figures, including Binance co-founder Changpeng Zhao, advocate for maintaining lower burn taxes, while others support updating the tax rate.
A user named “Terra Classic Validator by Lunanauts” opposed the tax rise, arguing it could negatively impact network activity as higher fees might deter transactions, lowering the anticipated burn rate and harming market sentiment. He referenced past tax increases that were subsequently reduced due to adverse effects on the ecosystem:
“We’ve seen similar tax hikes fail in the past, like the brief 1.2% tax which was eventually reduced due to negative effects on the ecosystem… While burning the supply is important, we need to focus on long-term sustainability, not just short-term burns. The tax increase might backfire by discouraging participation and harming LUNC’s growth.”
Another user on X expressed that raising taxes does not add value to the LUNC blockchain. Current voting results indicate that 43% support the tax increase, 16% oppose it, and over 41% voted “No with veto,” reflecting the divided opinion among community members.
LUNC's price has decreased by over 7% in the last 24 hours, likely due to a broader market downturn. However, trading volume has surged by over 40% within the same period, indicating continued active trading of LUNC.