Terra Luna Classic (LUNC) is once again in the spotlight as the community grapples with a proposal to significantly increase the on-chain burn tax. The current 0.5% tax could be doubled to 1.5%, a move aimed at accelerating the burn rate of LUNC and USTC tokens.
The proposal, put forward by Terra Classic validator JesusisLord, seeks to boost the community pool and oracle pool funding while maintaining the overall burn tax rate until a target supply of 10 billion LUNC is reached. This echoes the original goal set when the burn mechanism was introduced.
A Risky Gamble?
However, the community is divided over the potential implications. Some fear that increasing the burn tax could deter major crypto exchanges like Binance from supporting the burn mechanism. Any changes to the burn process might necessitate adjustments on the exchange’s end, which could potentially lead to a suspension of the burn altogether.a
If the proposal gains traction and is implemented, it could lead to a substantial increase in the rate of LUNC and USTC burns. This, in turn, could positively impact token prices over the long term. However, the short-term effects remain uncertain.
Market Impact
LUNC and USTC prices have seen a decline in the past 24 hours, mirroring a broader market downturn. LUNC is currently trading at $0.00008094, while USTC is at $0.01889. Both tokens have experienced a decrease in trading volume, indicating reduced market activity.
Also Read: Terra Classic Community Demands Clarity Amidst LUNC Delisting Concerns
It remains to be seen whether the proposed burn tax increase will ignite renewed interest in the Terra Luna Classic ecosystem or if it will further dampen investor sentiment. The success of the Tax2Gas implementation, a prerequisite for the burn tax proposal to move forward, will also be a crucial factor in determining the future of LUNC.
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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