A Terra Classic validator seeks to bring LUNC to $1 by restoring the 1.2% burn tax rate previously introduced by Edward Kim.
Terra Classic (LUNC) is a long way from achieving the community’s desired $1 price target outlined in the ongoing revitalization plan. Consequently, various proposals aiming to accelerate the revitalization process have surfaced, with the most recent one coming from Christopher Harris, the JESUSisLORD validator operator.
Harris aims to enhance LUNC’s path toward reaching $1 by reinstating the 1.2% burn tax rate initially introduced by Professor Edward Kim last September.
IT'S UP!!! IT'S UP!!! IT'S UP NOW!!! 🔥🔥🔥
MY FINAL VISION PLAN FOR #LUNC TO $1+ IS UP FOR VOTE NOW!!! 🏆🏆🏆
MY PROP #11549 IS LIVE!!! 💥💥💥
THIS IS THE COMPREHENSIVE PLAN TO SECURE OFF-CHAIN BURNS AND BURN TRILLIONS OF $LUNC!!! 🔥🔥🚀🚀
LET'S GO #LUNCCOMMUNITY!!!… pic.twitter.com/QL6TVM6TIg
— JESUSisLORD (@ForTheCross_CH) June 1, 2023
Dubbed “The Final Vision for LUNC to $1+,” Proposal 11549 aims to introduce a 1.5% on-chain tax, allocating 1.2% towards burns and 0.3% for ecosystem funding, specifically directed to the community pool or oracle pool. Essentially, market participants will pay a 1.5% fee. The network will burn 1.2% of the fees and send 0.3% to the community pool.
Additionally, the proposal intends to exempt dApps from the 1.5% on-chain tax to ensure that utility on the Terra Classic chain is not discouraged.
Harris suggests that if the signal proposal passes, the Layer-1 team will engage with the top 20 exchanges to incorporate the 1.2% burn tax on off-chain transactions (buy and sell transactions). As an incentive, these exchanges will be given a chance to submit addresses that would be whitelisted or exempted from the 1.5% on-chain tax.
Harris is confident that this approach will significantly boost LUNC burns, considering the current burn rate has been dissuasive. In response to criticisms of the model, Harris highlighted that the previous proposal to raise the burn tax rate to 1.2% resulted in a surge in LUNC price.
The Crypto Basic reported that increasing the burn tax led to widespread demand for LUNC last September, resulting in an impressive 70% price surge within 24 hours. LUNC experienced a rally to $0.0004407 following the introduction of the idea. In contrast, the proposal to decrease the rate to 0.2% coincided with a substantial decline in LUNC’s price.
The Previous LUNC 1.2% Burn Tax Proposal
It is worth noting that Terra Rebels, a prominent Terra Classic development group, and Professor Kim in September 2022, formulated the initial concept. After extensive deliberation, the community approved the proposal, gaining support from various exchanges such as KuCoin, MEXC, and Binance. Several exchanges also implemented the tax on off-chain transactions.
However, the heightened tax discouraged market participants, who were required to pay higher fees for their LUNC transactions. This resulted in reduced demand and a decrease in LUNC volume. The community had to lower the tax rate to 0.2% in October 2022 to address the situation. Several proposals to once again reinstate the 1.2% rate have been rejected by the community.
Most recently, dfunk, a notable member of the LUNC community, put forward a proposal to raise the burn tax to 0.5%. Due to its moderate increase, the community recently approved the proposal. In contrast, Harris’ proposal has faced criticism, with a significant majority of votes (up to 80%) going for “No with Veto,” while only 17% expressed support with “Yes.”