LUNC Burn Tax Set To Rise To 0.5% As KuCoin Proposal Receives Approval
May 20 2023 - 8:50AM
NEWSBTC
After garnering the required votes, a major proposal has just
passed in the KuCoin network. The proposal aimed at raising Terra
Classic LUNC burns tax to 0.5%. Following the positive
results, KuCoin declared increasing the LUNC network burn rate from
0.2% to the proposed 0.5%. LUNC Network Burn Tax Spikes On
KuCoin KuCoin took to Twitter to announce the increase in the burn
tax. In its announcement, KuCoin stated that it would facilitate
the Terra Classic LUNC and TerraClassicUSD (USTC) increase on its
platform following the burn tax activation. Related Reading: Shiba
Inu Falls Below Critical Support, Is It Time For You To Buy?
Notably, the activation will occur at the designated Terrra Classic
block height of 12,902,399 and take effect on May 23. Once
activated, KuCoin will pay users more for transactions involving
the two crypto assets, LUNC and USTC. Apart from the increased
payments, the burn rate tax will reduce LUNC supply. But
there’s still a downside to the increased burn rate tax as it will
reduce the trading volume. This is why many exchanges rejected such
proposals in the past. Notably, KuCoin has always supported
such increases even when other exchanges delay. For instance, the
exchange first supported a September 2022 Terra Classic burn tax of
1.2% even before the proposal passed. Other
exchanges, including Crypto.com, MEXC, and Binance, only later
declared support for the burn tax. But after the proposal
passed, data implied that the increase reduced the trading volume
for LUNC. Many investors stopped trading with the asset due to the
spike in fees. Related Reading: NFT Market Takes A Hit: Sales Could
Drop Below $1 Billion For The First Time In 2023 Following the
outcome, the LUNC community voted to reduce the burn tax to 0.2%,
attracting the support of crypto exchanges such as Binance.
After the reduction, the Terra Classic community brought up another
proposal to increase the burn tax rate, but it wasn’t
implemented. Latest Burn Tax Increase Proposal, 3 Others Gain
Massive Support While other proposals to increase the burn tax
after reducing it from 1.2% to 0.2% failed due to several debates
and arguments, the latest one received massive support. One of the
reasons proposal 11515 passed was the conservative increase, which
wouldn’t spike fees and discourage investors. The proposal focused
mainly on reducing the excess supply of LUNC tokens in the market
to prevent oversaturation and its associated risks. But, it
is not the only proposal submitted to the LUNC community. An active
member raised 3 other proposals, plus the burn tax increase to
enhance economic policies on the network. The three others
aimed at augmenting demand by increasing staking rewards,
whitelisting smart contracts to enhance chain utility and volume,
and increasing community pool funding to bolster developer funding.
-Featured image from Pexels, chart from Tradingview
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