Terra Classic Community Faces Choice 1.2% Burn Tax And LUNA Merger

The Terra Classic community is still considering a proposed 1.2% tax increase and merger with Do Kwon’s Terra.

Proposal 10950 by Terra Rebels core developer Edward Kim to re-enable three IBC channels for Cosmos-based chains Osmosis, Crescent, and Juno has already passed the “pass threshold” with 100% support.

Furthermore, Edward Kim stated that the community could expect a significant increase in the number of projects built on the network following the v23 upgrade, which includes the CosmWasm upgrade.

With the developers expected to reopen IBC channels at block 10,542,500 on December 5, Proposal 10960 intends to raise the burning tax to 1.2%, with 0.96% taxed as an on-chain burn charge and 0.24% allocated to the Community Pool.

The idea seeks to capitalize on the higher volume from Osmosis and compensate for the sluggish burn rate following the adoption of the 0.2% burn tax. In addition, the proposal’s second section proposes dividing the 1.2% burn tax to control burn rate, community pool charge, Oracle rewards pool fee, and USTC repeg pool fee.

The plan was met with opposition from developers and popular validators who felt it would only harm the chain. Validator ClassyCrypto stated in a tweet:

Meanwhile, the community is divided over whether to raise the burn tax parameter from 0.2% to 1.2% in light of the reopening of the IBC and whether LUNC should merge with LUNA.

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