After getting the required votes, a major proposal has just passed in the KuCoin network. The proposal aims to raise the Terra Classic LUNC burn tax to 0.5%.
After the positive results, KuCoin announced an increase in LUNC network burn rate from 0.2% to the proposed 0.5%.
LUNC Network Burns Tax Hikes on KuCoin
KuCoin took over Twitter To announce a burn tax increase. In its announcement, KuCoin stated that it will facilitate the raising of Terra Classic LUNC and TerraClassicUSD (USTC) on its platform after the activation of the burn tax.
Notably, the activation will occur at the specified Terrara Classic block height of 12,902,399 and will take effect on May 23.
Once activated, KuCoin will pay users more for transactions involving cryptocurrencies, LUNC and USTC. Aside from the increased payments, the burn rate tax will reduce the supply of LUNC.
But there is still a downside to increasing the combustion rate tax because it will reduce turnover. This is why many exchanges have rejected such proposals in the past.
Notably, KuCoin has always supported such increases even when other exchanges have been delayed. For example, First support exchange Terra Classic incineration tax in September 2022 at 1.2% even before the proposal is approved.
Other exchanges, including Crypto.com, MEXC, and Binance, only later announced their support for the burn tax.
But after passing the motion, implicit data That increase reduced LUNC’s trading volume. Many investors have stopped trading the asset due to the high fees.
After the result, the LUNC community voted to lower the burn tax to 0.2%, attract support From cryptocurrency exchanges such as Binance.
After the cut, the Terra Classic community put forward another proposal to increase the burn tax rate, But it was not implemented.
The latest proposal to increase the burn tax, 3 others are getting massive support
While other proposals to increase the burn tax after reducing it from 1.2% to 0.2% failed due to many debates and arguments, the latest one received significant support.
One of the reasons for passing Proposition 11515 was the conservative increase, which would not increase fees and discourage investors.
The proposal mainly focused on reducing the oversupply of LUNC tokens in the market to prevent oversaturation and associated risks.
But it is not the only suggestion made to the LUNC community. active member Starch 3 other proposals, in addition to increasing the burn tax to promote economic policies on the network.
The other three aim to increase demand by increasing staking rewards, whitelisting smart contracts to boost chain utility and scale, and increasing community pool funding to boost developer funding.
Featured image from Pexels, chart from Tradingview