.2% / 1.2% "smart" burn mechanism for all transactions on-chain :

This is a Burn proposal for all transactions on-chain (taxable transactions on-chain as described in proposal 4661). This proposal is a bridge between the .2% and 1.2% burn tax. I know the community has been divided over tax percentages and wether or not it should be higher or lower. Therefore I decided to come forward with a proposal that could cater to both sides of the argument as they both make some very valid points. This can bring users to the chain but also allow us to raise the taxed percentage to a significantly higher number. It would be limiting the potentially negative effects of a higher tax on our users while maintaining on-chain activity. It will also allow for a smooth development of the chain and its utilities.

Details of the proposal :

All transactions on-chain (only taxable ones) will see 1% of the transaction locked for a period of 21 days on user’s wallet (almost as if it were being staked) and .2% burned automatically (1.2%). Essentially, users would see a 1% portion of their transacted tokens locked on their wallets and unavailable to be transacted in any way and .2% burned automatically. Only after 21 days will the Burn mechanism be activated on the 1% amount of tokens that was locked from the time of initial transaction. It is important to note that it is not per say an immediate and full taxation of the 1% as tokens will still appear as being locked on users wallets and that only a percentage of the 1% will end up potentially being burned. After 21 days a portion of the 1% is burned and a portion is unlocked based on price action. If the price goes down from the time of initial transaction after the 21 day period, none of the 1% amount gets burned and tokens are unlocked. If price goes up, part of the 1% gets burned based on price (all is explained below). Again, It is after a period of 21 days that the taxed amount on the 1% is calculated and applied automatically. The amount that is not burned is simply unlocked to be transacted or simply held by user.

I just want to reiterate that .2% of all taxable transactions on-chain will still BE BURNED.

Now this is regarding burns on our 1% locked amount :

1 - When price of LUNC falls bellow that of the time of initial transaction after 21 days :

The 1% LUNC token amount that was locked for 21 days is unlocked. In other words, no burn takes place on the 1% amount that was locked.

2 - When price of LUNC rises above that of the time of initial transaction after 21 days :

On the contrary, if the price rises above that of the time of initial transaction, the us dollar $ value of the 1% locked amount at the time of original transaction is used as a reference to calculate the amount of LUNC tokens that will be allocated/unlocked and the percentage that will be burned. Using the dollar value of our initial 1% at the time of original transaction, we can calculate the amount that is allocated. In other words, when the price goes up, it is almost as if we were purchasing LUNC at current market value (after the 21 days) but using the dollar value of 1% of our initial transaction to do so. If price goes up, we then end up with a surplus LUNC token amount. Any of that surplus shall be sent straight to the burn wallet.

E.G. When price falls below initial transaction:

If I transact 10million LUNC tokens at a price of 0.0001$, 100k tokens are locked and 20k tokens are burned automatically.
Two months later the price drops below from the time of my initial transaction to 0.00004$. What happens then is that the 100k locked LUNC tokens from my initial purchase are unlocked and no burn on that 1% amount takes place. I lose dollar value on that 1% amount but I don’t lose any my original 100k locked tokens.

E.G. : When price rises above initial transaction:

If I deposit 10million LUNC tokens and the price of LUNC is 0.0001$ at the time of transaction, again I end up with 1% of my 10million LUNC tokens locked and .2% burned automatically (20k LUNC).
Again, 1% of 10 million tokens represents 100k tokens which at the time of my original transaction represents a value of 10$.
21 days later, the price rises to 0.0004$ - Using the initial 10$ which represents 1% of initial transaction, 25k LUNC, which represent 10$ worth of LUNC at current market value are unlocked/allocated while a 75k LUNC token surplus from my locked tokens is automatically sent to the burn wallet. I’m essentially not making interest on 1% of my initial deposit in case the price rises but I’m maintaining the $ value of 1% of my original transaction.

The 1% locked amount could be much higher in the future. Not only could we burn many tokens everyday but we will also preserve our users from being unfairly taxed. Let’s imagine we apply this method and raise the locked amount to 2, 3% or even higher - Users will perhaps be more willing to make transactions if they know part of their investment is somehow being protected.

This maintains the .2% automatic tax and adds an additional smart tax on a locked 1% amount of all transactions.
Price goes up - 1% of initial dollar value is maintained.
Price goes down, 1% of tokens are preserved. This is a win/win situation for both the price of LUNC, users and the chain. The higher the price goes, the more tokens get burned.

And last but not least, I would like to note that it would be beneficial for the chain to allocate a portion of the taxed amounts to replenish both the community pool and the oracle pool as previously mentioned in proposal 10960. I think this is a very good idea and would very much encourage its author to make another proposal regarding this matter. This is not a part of this proposal.

This proposal is one way to push people to migrate on-chain while we manage to maintain pressure on major CEXs to follow the communities desires for LUNC.


I think that redenomination 1LUNC for 10LUNC, or however its called, is much better idea than playing with tax, the lower tax the better

Wow, very interesting proposal! Love the idea of a smart burn! Seems to be the best of both worlds