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.

LUNC daily chart. Source: CoinCu

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Harold

CoinCu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.