LUNC enthusiasts may soon see a more streamlined tax system on the Terra Classic blockchain. OrbitLabs, a development team, has proposed a comprehensive review of the newly proposed “Reverse Charge” tax mechanism. This approach aims to simplify tax handling by automatically deducting taxes from the recipient of a transaction, instead of requiring it from the sender.
Simplifying Taxes on Terra Classic
The current tax system on Terra Classic requires senders to include additional tax charges in their transactions. The “Reverse Charge” system aims to eliminate the need for these manual calculations, improving user experience and potentially minimizing tax processing complexities.
Before the review can proceed, OrbitLabs needs the Terra Classic community’s approval within a 6-day window. If approved, the team proposes a $2,500 USD payment in LUNC for their service.
Review Process and Potential Benefits
The review will involve a thorough code audit, feature validation, and ensuring the mechanism aligns with Terra Classic’s goal of simplified tax management.
Potential benefits of the “Reverse Charge” system include:
- Reduced Complexity: The new method could streamline tax handling by eliminating the need for senders to calculate and attach extra fees.
- Improved User Experience: This approach simplifies transactions for users by removing manual tax calculations.
- Backward Compatibility: The system aims to maintain compatibility with existing applications to minimize disruption to existing LUNC dApps and third-party services.
Early Testing Shows Promise
Initial testing conducted on Terra Classic’s rebel-2 testnet suggests the “Reverse Charge” system might be both efficient and backward compatible. Tests conducted by developer StrathCole indicated successful tax deductions on transactions without impacting other dApps. For example, one test showed a user sending 1,000,000 LUNC, with the recipient receiving 995,000 LUNC after taxes, all without the sender needing to include additional fees.
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Timeline and Transparency
OrbitLabs has proposed a two-week review timeline upon approval. The first week will focus on a comprehensive code review to ensure security and functionality. The second week will involve fixing and updating tests for compatibility with Terra Classic’s latest SDK version (0.47) and ensuring the system functions correctly across various scenarios.
OrbitLabs has a history of collaboration with the Terra Classic development community and has pledged to work closely with developers and community members during the review process. Additionally, the team has completed KYC verification, fulfilling requirements for code review contributors outlined in Terra Classic’s Proposal #12129.
Bullish Sentiment for LUNC
The news of the proposed “Reverse Charge” system coincides with a period of bullish momentum for LUNC. At the time of writing, LUNC is trading at $0.00009364, up 2.3 % in the last 7 days. Some analysts suggest the potential approval of this tax mechanism could propel LUNC price to a 207% rally.
Whether this prediction comes true remains to be seen, but the introduction of a simpler tax system could significantly benefit user experience and potentially bolster the future of Terra Classic.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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