Terra Classic Community Reduces Tax Burn To 0.2%
Contributors to the Terra Classic network have cut the so-called burn tax charged on all Terra Classic token (LUNC) transactions.
Contributors reduced the tax rate from 1.2% to 0.2% since the earlier rate was thought to cause a decline in network activity.
The new rates went into effect today at 12:50 p.m. UTC after the community’s approval of governance Proposal 5234, which reduced the number of tokens burnt with each transaction. Binance also announced this adjustment:
Last month, the Terra Classic governance council voted to levy a 1.2% tax on each LUNC transaction and trash the proceeds in a bid to reduce LUNC supply, believing that fewer tokens in circulation would enhance value.
While the 1.2% burn fee was intended to strengthen LUNC’s tokenomics, it actually discouraged usage and reduced on-chain activity. According to estimations from key contributors, the tax reduced LUNC’s on-chain transaction volume by 91.67%.
At the time of writing, LUNC is trading at $0.00025.
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