- The Terra Luna Classic community is voting on a proposal to increase the on-chain burn tax from 0.5% to 1.5%, aiming to boost LUNC and USTC burns, as well as contributions to the Community and Oracle Pools.
- While supporters believe the move could enhance network funding and trigger a price rally, the community remains divided, with 43.24% voting in favor and 40.74% vetoing the proposal.
The Terra Luna Classic (LUNC) community is abuzz with discussions over a new proposal that could redefine the network’s economic dynamics. Proposal 12149, which seeks to revise the on-chain burn tax from 0.5% to 1.5%, has stirred both optimism and dissent among its members. Here’s a closer look at the implications of this controversial move.
The Proposal at a Glance
The proposed adjustment aims to increase the burn tax, which would significantly boost LUNC and USTC burn rates. This change is expected to bring triple the current contributions to both the Community Pool and the Oracle Pool. The current tax allocation splits 0.5% into 80% burn and 20% pool contributions. Raising it to 1.5% would increase the effective burn tax to 1.2% and bolster the ecosystem’s funding mechanisms.
This proposal follows the recent v.3.3.0 network upgrade, which streamlined tax handling and reduced the developmental overhead for projects on the Terra Luna Classic blockchain. Advocates believe the higher tax rate will stimulate long-term growth, bolster staking rewards, and potentially drive a price rally for LUNC.
A Divided Community
Despite its potential benefits, the proposal has ignited significant debate. A portion of the community, including Binance co-founder Changpeng “CZ” Zhao, supports maintaining a lower burn tax to ensure the network remains attractive to developers and projects. Others argue the increase is overdue, especially as the chain aims to restore its former glory.
As of now, the voting stands at 43.24% in favor of the proposal, with 16.01% opposing it outright and 40.74% vetoing it. Validators and delegators remain split, with one validator expressing frustration, calling the repeated attempts at tax revisions counterproductive.
Market Reactions
The proposal has coincided with volatile market conditions. Over the past 24 hours, the LUNC price has fallen by 9%, currently trading at $0.0001135. Despite the drop, trading volume surged by 38%, indicating heightened interest in the asset. Similarly, USTC experienced a 7% dip, with its price sitting at $0.02029 but showing an 87% increase in trading activity.
What’s Next for Terra Luna Classic?
If passed, the proposal could mark a turning point for Terra Luna Classic. The increased burn rate may reduce the total supply more rapidly, potentially driving up prices. However, balancing tax rates with ecosystem development remains a delicate act.
The outcome of this vote will not only determine LUNC’s immediate trajectory but also shape its long-term appeal to stakeholders and investors.