AnteHandler "burn tax" split

Introduction

In order to avoid the re-minting of “manual burns” during the seigniorage calculation we have worked with DemonMonkey to detail a solution where in the system will collect the “burn tax” directly in the AnteHandler by altering the NewBurnTaxFeeDecorator code to split the “burn taxes” into two halves with one going to the Community Pool directly and another is sent to the burn wallet as per usual. In conjunction with a change to the RewardPolicy this will result in “burn taxes” being collected as intended while avoiding a re-mint of the “manual burns”.

Amendments

The current proposal consists of a single ammendment which seeks approval to deploy the altered NewBurnTaxFeeDecorator code.

Amendment 1/1

Approve the release of Merge pull request #4 from classic-terra/burntax-split · classic-terra/core@6b8b172 · GitHub into mainnet as part of v1.0.6.

Acceptance Criteria

Stops re-minting “manual burns” and instantly ships “burn tax” proceeds to the CommunityPool.

Summary

With this alteration of the system we hope to achieve an outcome that is desirable for all parties. As such we understand the concern about re-minting “manual burns” and it is our belief that if the code works as intended it will solve that problem until such a time where the RewardPolicy is altered in a way that would re-enable segniorage re-minting.

Consequnce of a YES vote

If we vote YES on this proposal we will have a clear path to deploying the new feature which will allow us to collect “burn taxes” without having to rely on the seigniorage logic built into the Treasury module.

Consequnce of a NO vote

If we vote NO on this proposal we will either be unable to collect “burn taxes” or we will have to continue re-minting “manual burns”.

8 Likes

Love it. Let’s make this happen so we can find some more development boom.

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Is there a chance to delay this for a month or two? Just to see how much CP can be filled through fees which were increased few weeks ago?

If there is pick up in transactions CP will be healthy without this proposal.

Or maybe there should be a cap for CP and when it is over the cap the rest is burned.

4 Likes

can we have the 5x fees go to CP and the Burn tax split go to Oracle?

Great idea. Let’s get it going.

I don’t understand don’t we already have no minting? We still have the 0.2% tax and have not minted for some time with the full 0.2% going to burns. Is this proposal a 50/50 hard code of the on-chain burn tax? Can this be changed by parameterisation?

If this is hard coded I vote NO, as I already shared my view in the prior proposal by Ed for the 50/50. Unless there is also an agreement to cap the CP with overflow to burn or oracle pool, then I would reconsider.

If the 50/50 split can be changed by parameterisation, to change the % going to the community pool such as 80/20 or 90/10 in the future if the community supports then I would vote YES.

We shouldn’t be hardcoding 50% of our burns away that’s not fair.

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Ed said this previously about looking into making the 50/50 being changeable by parameterisation? Was this dropped? Please explain whether the proposed 50/50 distribution is hardcoded or not. I support a parameterised split, so if we raise the burn tax later we can adjust the % split for burn/CP.

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I am also looking for clarification
By wording and dfunks proposals passing - I was under the impression that we have no more.mint.

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I don’t understand the obsession around touching the burn tax all the time.

The 0,2% burn tax and avoiding new minting are actually the only two current good things for the community and people want to change it.

We reduce the burning rate and price will drop immediately.

It’s frustrating!

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I agree to,plus the minting is not happening at the moment so is no rush for this one.

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If you’d deliver the multisig wallet as you said you would this wouldn’t be needed.

Please stop trying to save your legacy with this “burn tax should be a burn tax” crap. The tax is finally going to be able to balance chain needs with the burn. FYI burning 100% burn tax is the dumbest idea I’ve ever heard without all CEX volume being subject to the same. That’s what you sold us on the burn tax.

Just do it.
Massive development is coming,we need fund urgently.

As the trading fee rised,the refilling of community pool is so slow-as my observation,it’s around millions of lunc a day,that’s far from enough.

Compared with luna team,they have 40 ppl working and moving forward very fast,but we can’t afford more ppl just because lack of funding.

We’re doing a business,more investment we moving faster.If anyone wants lunc recovery faster,think about how to raise more fund for our development.

The 5x gas fee proposal passed on 5th January. It was activated by CEX on 14th January. Since then our community pool has risen from 1.079B to 1.167B over 22 days it has risen 88 million LUNC which is 4 million per day.

Over a three month period this would deliver approximately (90 x 4) 360 million LUNC. This is well short of the 900M we used to fund the L1 team for the first quarter.

So it appears with 3 weeks of data the gas fee increase is not sufficient for our funding needs and we have a big shortfall. We either need to do another 5x gas increase or find another funding source.

I would be okay with the 50/50 hardcap if we could also CAP the community pool. That way once we reach say 2 billion LUNC it will fund burns/oracle pool rewards with say a 50/50. So it prioritises community funding but then funds burn/oracle, or possibly 100% oracle pool for the overflow.

Ideally the 50/50 is parameterised. We discussed this already some time ago here on Agora with Ed saying he would look into it. It would be good to get some insight from the L1 team regarding their thoughts and the particulars of this proposal. Thank you.

2 Likes

This is correct. The gas fees are generating around 4M LUNC per day in the CP, which at current market value is $760 a day.

What you are missing thought is that the gas fees are also generating about 17K in USTC per day in the CP, which at current market value is $610.

In terms of dollar value at Current Market Rate for LUNC & USTC, the CP generates $1370 per day (from both LUNC & USTC), which is $126,000 for 3 months.

The funding requirement for the L1TF I believe is $135,000 for 3 months.

So yes there is a shortfall, but very very slight. A 7% increase in market value should cover this shortfall.

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as Zaradar said they are taking a significant pay cut working on the L1 team and could get a lot more money working for another project / company i would love to pay them more to be honest.

Thanks for this info as I was only considering LUNC proceeds from the gas. That’s good to know we are close to generating enough to fund the L1. Hopefully LUNC goes up 100% soon we can easily cover it then.

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The L1TF has already been paid as per the price determined by them for Q1. The gas fees can easily sustain their costs.

If their ask increases in Q2 (Starting April 01, 2023) and the price of LUNC & USTC and transaction volume on-chain has not increased by then - this can be proposed at that time. I see no reason for this proposal at this point in time, tbh.

Decreasing burn amount at this time will only negatively impact the community.

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Thank you for this important information @dfunk. That means our funding is appropriate for now and will be plentiful later when the LUNC/USTC price rises further, and we do not need the 50/50 split of the on-chain tax. We already stopped minting. All we need then from v1.0.6 is the Binance wallet whitelist (which I support).

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yeah we definitely do not need the 50/50 burn tax split as of now and it should be removed from v1.0.6, imo.

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I agree ,at the moment is no need for it.

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