1.2% Burn & Development Tax During IBC Reopening

The average daily volume whilst 1.2% was in place was 22Bn. With 0.2% in place, 43Bn. If you take out the day when new validators onboarded and the three days after FTX collapsed, which are the only four days where daily volume was over 100bn coins; the average daily volume for 0.2% across the remaining 31 days is 29Bn. This proposal recognises there are events that spike daily volume; indeed it acts to capitalise on one coming up. Daily volume for 1.2% and 0.2% outside of these events is roughly the same

6 Likes

We have so many capable programmers, why can’t we do it once and right?

In my opinion, the best now for us is:
Taking advantage of this volume peak is a way to do it. Taxing these transaction at a higher rate could more than make up for the turtle-paced burn rate we have seen for the last few weeks.

3 Likes

I am conflicted with the proposal.

I do like the tax increase move (though a middle ground might have been better) but the rewards policy is set a bit high. That single green candle will poke some eyeballs if it gets through!

Then again, I didn’t pay much attention to the Agora post to contribute in time, so the fault is on me.
Thanks again…

1 Like

I think tax stability is more important for LUNC narrative than the short term gain from this proposal. LUNC lacks a sense of stability and security to attract new investors and dapps. Need to create a more stable environment imo. So no vote from me.

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YES from me.
Everyone sounds like a broken radio at this point. “We need utilities … bla bla… dapps can’t build for the high tax… bla bla” … show me one genuinely good project that popped up after the unnecessarily rushed tax reduction to 0.2 % . NOBODY GIVES A SHIHHT ABOUT UTILITIES. Us investors in Crypto are only here to make money, 99% of us don’t care about “UTILITIES”. Look at LUNC’s trading volume since tax reduction. Day traders and scalpers moved on. Only reason we had massive increase in LUNC trading in August, was because of the Idea that we would BURN the supply down quickly. With the tax reduction, the result has been underwhelming to say the least. If you think people will just put $$ millions in LUNC because of some DAPPS and GAMES, I don’t know what to say to you people.
SHIBA INU is one of the most well known token with real world use Utilities. SHIB is right up there with BTC, BNB and ETH incase of actual use case. Why is SHIB still so cheap? Because its supply is somewhat unlimited. They got all these “dapps and games and utilities” but still stuck at .00001 . LUNC is the next underperforming SHIB. IF we don’t show investors we are not burning the supply down and just relying on some “utilities” to pop up. Pure HOPIUM.
We have to maximize these volume-spiking events. On-Chain Burn tax should be reinstated back to 1.2% ASAP. That’s a no brainer.
Also, TR official members ( @Vegas and others ) should seriously talk to other exchanges to implement atleast a 0.1% tax on buy and sell with the option of letting the CEXs keep 10% as compensation.

5 Likes

While a low and stable burn tax parameter would be nice to have in the long run, once we’ll have technical parity with LUNA2.0 and more dApps coming our way, I’m all for a return to the 1.2% if it’s temporary, and I would agree that the IBC opening is a unique opportunity to try and replenish both the community pool, reduce supply and fund the oracle Pool.

I would also agree on the analysis of the tax parameter history, it would have been nice to have a burn tax sooner, and I felt at the time that the reduction to 0.2% could have been more progressive and also made later.
As of now, we do not have much dApps, barely any, so I don’t see much problem in an increase in the %, but it should be lowered later on, some time after the IBC reopening

A Yes for me

1 Like

{
“subspace”: “treasury”,
“key”: “RewardPolicy”,
“value”: “{"rate_min": "0.8", "rate_max": "0.8", "cap": {"denom": "unused", "amount": "0"}, "change_rate_max": "0.0"}”
}

What is this 80% (0,8)? I may have missed it somewhere.

I like the fact “trapped funds” should be taxed. In effect are we also changing the 0.2% on-chain tax back to 1.2% ?

Will cexs apply this change?

1 Like

There are better ways to reduce the supply. With this proposal we cling to old solutions that have already changed. We should be a little more stable, it wouldn’t be a good sign. Indeed it would be seen as wanting to take advantage of the situation. For me it is NO.

Going up and down doesn’t make any sense. Please look for something better

There is nothing wrong with fluctuations in burn-tax and any other tax/fee rates (as long as the tax is not excessive ~ under5%? and goes ‘fully’ back into the community). Burning tokens apportions the market cap to everyone holding Lunc and benefits all, and, sending some of the tax revenue to our pool helps us fund the necessary development of our core that will attract third-party dapp developers (utilities) that attract users who will increase tax/fee revenue.

We are in a position where massive burn offs are necessary to redivide our market cap and increase the value of each Lunc, so ~ the lowering of that tax rate (soon after the initial 1.2% rate went into effect) was not a good move - I was against that lowering when it went up for discussion. People were blaming lessened activity on the initial burn-tax when that lessened activity was happening throughout all cryptocurrencies. I did like the 10% being sent to our pool though.

Burning staking rewards, converting the recently discovered ETH to Lunc and burning it ALL, and installing the appropriate circuit breakers (to prevent supply malfunctions) will put us back on track to being a great digital-commodity. I also think we should peg the USTC supply differently and create an actual stable-coin. Here’s more on that core design:

1 Like

My apologies in advance to all community members who provided feedback that I cant reply on time due to my real life commitments. I will try to respond when I can.

Please scroll through this loooong reply - I will try to address as much as I can!

I really appreciate your input. Whichever way this proposal goes - good ideas that you share will improve the tax in the future. I have no doubts about that.

I’d like to provide additional materials in support of my proposal 10960. These were created by the props co-author LUNC_S6. His proposal was slightly different but we decided to merge it into one not too create confusion between community.

First table compares volumes and burn rate between both 1.2% and 0.2%. Second one is His article with lots of useful data.

Conclusion to be drawn here is simple - we have only seen on-chain volume increase from 0.2% at a time when 30 New Validators have opened. The reason for that increase was Validators and stakers bringing in LUNC onchain to either keep their vote share or improve it.

I predicted this would happen as 0.2% tax was advertised. I warned we would loose Burn volume because of the tax decrease at this particular time.

I was right.

I will also be right when in December volume will jump due to IBC reopening and price of LUNC will dip due to people selling discounted bags off. All of this while our total supply will be STILL sitting at 3.9 Trillion due to practically 0% tax.

We can still prevent this.

0.2% is a motivation for people to sell - 1.2% is a deterent. It would split the Sell Off wave into 2 or more smaller, easier to control peaks and encourage people to Stake rather than sell.

The window of opportunity we have to act will soon close. Please consider the entirety of my prop and act now!

QA REPLIES
@pivo4et
PUT COMMUNITY POOL FUNDS IM STAKING
Great idea to put funds into staking. The advice I would ask for though from someone more knowledgeable as I may be wrong, but - this would negatively impact the overall APR to individual stakers too right? This would need an overall impact analysis

@Jason_Ball
I understand you’d like to send part of the tax directly to the Grants funding? Would be good to have feedback from Edward Kim on this. Your option might be more sustainable and less problematic than to request funds manually each time?

@CHEERS_TECHIES
Figures were agreed with co author of this prop, we tried to decide of community pool fee between 10 and 30%. Since 1.2% is the tax rate and reward policy is 0.8, then it effectively is 0.96% burn and 0.24% community pool. This is approximately, since there is no way of setting accurate tax split at the moment. This would require devs to upgrade the tax mechanism. Since the prop was put on Agora, twitter and Discord a week or so ago, I have received little to none feedback on those values (0.96% and 0.24%) so they were left at these values.

A question of my own - can you as member of TCCD address my second proposal which is a community request for your validator to adjust your name. Some validators have found it misleading and unfair. Since you took time to answer here, there should be no problem to address the other agora proposal too. Please?

@awlionking suggest setting the rate at 1% total tax per transactions.

I also read Edward Kim’s article regarding machine learning to figure out what works and what doesn’t it terms of taxation.
Personally I would be ok with this if that brought more people on board. Hence the IBC Reopening has been moved forward I didn’t have a choice but to launch this proposal with 1.2%. Not many people suggested changing the total rate, except for yourself hence I didn’t have enough feedback to do this.
My justification for bringing the tax rate back to 1.2% is lack of any improvement in terms of Volume or Burn Rate after the 0.2% change was implemented. Hence, it’s reasonable to put it back where it was. By using the machine learning approach rising the rate above 1.2% would also be correct.

username2030
Suggested there is something wrong with me. Feedback noted. Can’t say Id agree though. I’d like to encourage you to re read the proposal and analyse the taxation timeframe we have used in the past. Perhaps it will take you to analyse efficiency based on real life events and our governance record

awhitehouse luna-legend PindaPappi
Didachos Jonadab-Oluikpe
This proposal doesn’t aim to change the past. It is analysing past events to learn from and prevent them from happening in the future. It is called developing a p r o a c t i v e approach - contrary to reactive and late approach we have been currently using.
Since inception we had 3 tax rates - 0%, 1.2% and 0.2%. The first 0% was the generic one. 1.2% was running for 3 weeks with good results (as explained in the proposal). 0.2% had bad results - decreased volume and bringing burn rate to effectively 0. Since we are talking about 2 different tax changes so far and between 1-2 planned in the future as per this proposal I don’t agree with calling the situation ‘changing the tax back and forth’.
This approach I offered is in agreement with what Edward Kim described in his article as Machine Learning/Algorithmic Pattern. It is about figuring out what works and what does not.
2nd Keeping a bad decision in place is worse than making more changes - common sense approach.

flydeoo
Suggested Taxing anyone undelegating before 21 day lockup period and sending these funds to fund devs, Oracle Pool and burn.
Thanks for your input - this requires dev work, which I believe will not happen any time soon. My proposal takes the workload of devs into account. I am aware this is not a perfect solution- but a pragmatic and easy to adopt one.
I hope your feedback is considered in the long term

@Igor_Veras I appreciate your focus on the long term gains, however with such hardline focus we are giving up on HUGE opportunities to reduce our supply from predictable events. Please consider to analyse the part of the prop which says about past governance decisions.
My prop is about reaching a compromise. I want to burn billions from IBC volume returning to LUNC chain - You want to have long term low tax approach.
OK - Let’s do both as per my prop!

kch2134 LUNCnate M1NZIE
Suggested increasing the tax rate would result in volume decrease.
I can only offer to analyse 1.2% and 0.2% volumes attached. There is no data backing up your claim. With the introduction of 0.2% tax, the volume did not increase (no improved onchain activity). Why do you assume thay if the situation is reversed, the volume will decrease out of sudden? Past data does not confirm that.

@Dannavan_Morrison
This code is the only workaround possible to send money to the Community Pool. It was used first time in 0.2% proposal. It was confirmed to work by Edward Kim.
Effectively we are taking 1.2% from each transaction and sending them to burn wallet. After that we re-mint 20% from those 1.2%. It gives us 0.96% burned and 0.24% sent to the pool.
At this point the tax parameter is quite medieval and doesn’t allow us to set the tax split accurately. There is lots of feedback on how to improve it - but it’s a long story and dev work required too. Something there is no time for at the moment.
This change will indeed increase the onchain tax to 1.2% for all transactions. There is no other way to do it as of now.
Will Cexs apply this change? They did in the past. Since Vegas is supporting this prop, I guess he and his Validators team will be willing to communicate such a change.

@Koch suggested sending 10% to the Community Pool instead of 20%. I would be ok with that, however I received little feedback on these figures before the prop wad put up for a vote - so I kept them as they were. Sending 20% gives us flexibility what to do with them next - should we end up in a surplus - they can be sent to burn wallet manually.
Also suggested burning the staking rewards and converting the multisig funds to LUNC and burning them after. Appreciate the feedback, however this second part of the comment is outside of what my proposal can achieve. I wish you all the best though.

Thanks guys, that will be it for round 1 of discussion summary. Looking for your further ideas!

Are the greedy pigs back? What you have to do is build a roadmap and develop the most active community on Twitter.
What kind of selfish pig idea is a Scrooge idea to tax the liquidity that will temporarily flow in due to the IBC? Greedy people like you should be ostracized as soon as possible for the chain.
What’s the difference with the atrocities of low-income countries that rip off tourists?

In the time to come up with these dirty ideas, fill out one more application for Binance’s IRI fund. Repeggings are impossible to burn for decades with taxes. The funding of huge institutions will have far greater consequences than your petty ideas.

2 Likes

Increase to 0.4 - 0.6 is a better option to keep the burns going while not scaring away new developments on chain. 0.05 goes to developers/community pool. Also suggest to shorten the undelegate period from 21 days to 7 days to allow more movement in and out of terra classic chain

2 Likes

Thanks for the feedback on the figures friend. Its too late now to revise the Terra Station proposal, but im collectung feedback for the future.
On the Staking period you mentioned - this was already voted once and the proposal unfortunately didnt pass. Maybe it can be considered again in the future.

An impressive and very good study, the best I have seen so far. I will support !

1 Like

Pleas see an explainer/review of my prop by Happy Catty Crypto.

1 Like

1.2 deters, the table shows that the optimal tax is 0.6-0.8(with an emphasis on 0.8)

you are not professional
You offered agora and you didn’t listen to the comments.

Also to present a proposal

no good

sorry my language is not good

Thanks for the explanation.