Final Vision Plan for LUNC to $1+ 24/4/2023
This is a finalised and refined version of my Vision Plan for LUNC to $1+. The prior agora thread which has been up for over a month is linked here: Vision Plan to achieve $1+ LUNC.
The overarching goal of this proposal is to achieve significant off-chain burns on exchanges by a 1.2% burn tax on buys and sells, so that the 6.9 trillion LUNC supply can be burned down in a timely manner, leading to the recovery of the chain. This proposal details a specific method for achieving this goal which I believe has a high prospect of success and is worth the effort to re-visit. The proposal also makes necessary on-chain tax changes to match the 1.2% burn tax, provide a 15x funding increase to the chain, and exempt’s dapps from tax to ensure a burn and build strategy moving forward for LUNC’s future.
Almost all LUNC traded volume occurs on exchanges with todays volume being $48,024,927. This at current price of $0.000110 is 436.6B LUNC traded per day. If we had the 1.2% burn tax on this entire volume this is 5,239,082,945 billion LUNC burned per day. If we take a more conservative figure of participating exchange volume, halving the total daily traded volume to $24,012,463. This is 218.3B LUNC traded per day, and if we had the 1.2% burn tax active on buy/sells it would burn 2,619,541,472 LUNC per day.
This is at low volumes in a market correction and a continual decline in LUNC’s price, we can still be burning over 2 billion LUNC per day. This burn rate of 2.62B LUNC per day is 78.6B LUNC per month, 943.0B LUNC per year, and to burn almost the whole 6.9T supply is 7.2 years. We could burn much faster in a LUNC bull market with higher trading volumes. This example shows how powerful achieving the 1.2% burn tax off-chain can be for LUNC’s recovery.
The effects of a rapid and continual reduction of the LUNC supply would bring renewed interest to the chain, would result in new investors, speculators and traders coming to the hype of recovery. As far as I am aware no other coin has succeeded in achieving an off-chain burn tax on major exchanges. I believe we can certainly achieve it due to our unique history of our coin, and the strength of our community. The hope of off-chain burns was the spark of the original revival movement, and the great unity and community we had together. Sadly with infighting, bitter governance disputes and stalled progress, LUNC is struggling to rise up after the catastrophic collapse that befell it.
LUNC used to be called LUNA and traded at an all-time high of $119 before its pegged “stablecoin” UST suffered a de-peg and death spiral. All attempts to stop it failed, and LUNA’s supply hyperinflated to 6.9 trillion as we have now, and the original creators of LUNA abandoned the coin, took the original name, and left behind LUNC (Luna Classic), what we have now. Many contributed to the beginnings of LUNC’s revival to get us to where we are now, but there is much greater opportunity ahead of us for the chain and for its investors.
We are in a unique position to bring about a great revival and recovery of LUNC, to not only restore its former glory, but to forge a new path as a chain as we burn down our supply, and greatly increase the price. By restoring our chain and funding it, we can make it flourish. By burning the supply by a fair tax on trading volume and on-chain transfers, all who interact with LUNC will contibute together to the restoration and new life of the chain. This is a fair and reasonable tax, and is not excessive or burdensome. It is necessary for the advancement of the chain.
With my Vision Plan, I have put together a specific method of achieving the goal of the 1.2% burn tax off-chain, while not disrupting our chain’s ability to grow or on-board utility (dapps). We can burn and we can build. We don’t need to just choose one. Burning and building is better than building alone, or burning alone. We can do both together excellently in this plan.
We as a community attempted to obtain off-chain adoption of the 1.2% burn tax before. Sadly, after only 3 weeks of the 1.2% tax on-chain, it was lowered to 0.2%, destroying our attempts at securing the tax off-chain. Despite this, we did achieve CZ Binance offering a 1.2% burn tax opt-in feature, agreeing the 1.2% burn tax could work if all exchanges implement it (as stated in 23 September 2022 AMA), and we secured off-chain burns of Binance’s fees. We accomplished a lot with the tax only in place for 3 weeks! We accomplished so much in that time because the community was united together. Sadly the removal of the 1.2% tax destroyed the unity of the community, and great dissension and division entered. People who supported the tax were upset, and proponents of a lower tax supported the move believing higher utility, volume and burns would result from lowering the tax.
It has been over 6 months since the removal of the 1.2% burn tax and the implementation of the 0.2% tax. We did not see the volumes, utility or burns that were promised and the price of LUNC has only declined and stagnated. We need to change. The lower tax did not increase our volumes, improve our burns or our utility. Aside from important technical development of the chain (L1 work), we wasted a lot of time with LUNC’s growth.
Now is the time to recognise that we need a drastic shift. We need a major change, and to go out on a limb and really push for something revolutionary. This is what I am proposing.
I am asking for 6 months time, for united community effort behind this Vision Plan, to achieve significant adoption of the 1.2% off-chain burn tax. If we cannot achieve significant adoption of the 1.2% burn tax on major exchanges in 6 months time, the plan is a failure, and the tax changes can be rolled back, and put us back to our present situation. I believe in this plan and that it is worth a real shot, to fully explore off-chain burn tax adoption, as our prior efforts were cut short and not fully explored. We also have additional measures at our disposal now to help us succeed in this cause.
As to the specifics of the proposal, it has been laid out carefully in a flowchart I have made, for visual demonstration:
The governance steps of the proposal are:
1. Text signalling proposal for the Vision Plan for LUNC to $1+, with all relevant details according to the flowchart, authorising L1 Team involvement, and putting up for vote for community approval of the plan.
If this proposal passes, the next 3 proposals follow shortly after simultaneously or as quickly as possible:
2. Parameter change to adjust on-chain tax to 1.5%.
3. Parameter change to adjust the tax split to 80/20% (from 90/10%). This leaves a 1.2% burn tax (6.67x our burn tax rate) and 0.3% to the community pool (15x our current funding rate).
4. Text proposal to exempt dapps from on-chain tax, as proposed by dfunk on agora.
After these proposals are passed, the plan is live, and the push for off-chain burn tax adoption begins. This is the official beginning of the plan. At this point the community will proceed to request the exchanges to adopt the 1.2% burn tax off-chain. By our united community effort we can achieve great things. The community will apply consistent pressure and attention to this issue to all major exchanges. As the proposer who strongly believes in this plan and its success, I will take full responsibility for its implementation to the best of my ability. I will do whatever I can, and will communicate as to the progress of the plan to the community regularly.
The next step is the L1 Team will reach out to the top 10 to 20 exchanges by volume, approaching them with our offer, our incentives, and our question. The exact list will be finalised with the L1 Team. They will also answer any exchange technical questions regarding implementation, and assist wherever possible.
The offer is that we ask the exchange to implement the 1.2% burn tax on their exchange buys and sells. They can arrange to send the LUNC to the burn wallet immediately, daily or weekly. The incentives is that we offer internal wallet whitelisting from the 1.5% on-chain tax, and we offer deposits to their exchange being exempt from on-chain tax. This allows exchanges to make internal transfers of LUNC for security purposes exempt from tax (Binance already has this in place), and also encourages deposits to their exchange. LUNC withdrawals from exchanges would be taxed at the on-chain 1.5% tax rate. We offer these two incentives, and then ask our question.
The question asked to each exchange is: “Would you agree to apply the 1.2% burn tax on LUNC buys and sells if other exchanges do the same?” The answer each exchange gives is kept private on a list the L1 Team keeps confidential, with no leaking.
This period is the negotiation period, where exchanges are contacted, the offer, incentives and question is put forward. the L1 Team (I will assist wherever possible) will communicate with exchanges and negotiate to reach a consensus.
Once we have reached a consensus of major exchanges, we negotiate privately for them to launch simultaneously on an agreed upon date. A simultaneous launch means that no individual exchange is stepping out alone to apply the tax. This allows us to acheive exchange support while alieviating any concerns they may have about people leaving their exchange (a concern CZ raised earlier). The incentive of deposits exempted from on-chain tax to their exchange also helps with this. The exchanges are given time to prepare any necessary measures, and once we have their agreement, and they are ready, a public announcement is made to the community of the launch of the 1.2% LUNC burn tax on exchanges buys/sells.
5. At this point the final governance proposal/s will be made to whitelist all applicable exchange wallets before the launch date.
At the launch date, the 1.2% burn tax is applied across major exchanges, so on every LUNC buy and sell, a 1.2% tax is applied which is burned either immediately, daily or weekly.
As a result of this our burn rate will skyrocket. We will likely see huge price interest and volume even at the announcement. This will only help us burn even faster. At the implementation by major exchanges, my Vision Plan is a success, and the rapid burning of the LUNC supply begins, and LUNC’s pathway to $1+ is secured.
Only by massive burning of the supply can we achieve $1+. This is the way. This is the path forward. I believe in this plan, and believe that as a community we can achieve it together.
The final step of the plan is to continue to push for off-chain 1.2% burn tax adoption on other exchanges who have not yet participated, to achieve near unanimous adoption by traded percentage volume for LUNC.
This is the totality of the Vision Plan for LUNC to $1+. I believe we can achieve this within 6 months of the start of the plan (when the on-chain tax changes come into effect). If we do not succeed in 6 months time, the tax changes can be rolled back and we will be in the same position we are now.
This plan does not have any complex algorithims. There is no complex code needed. This is a simple plan, with a simple 1.2% tax implementation on exchanges. They can do this easily without issue. We have a straight forward, easy to understand and achievable path for LUNC to $1+.
Questions about the plan?
I will answer some common questions I have seen about the plan from the previous agora and on twitter:
- Why a 1.5% on-chain tax? Isn’t that too high?
The 1.5% tax allows us to have the 1.2% burn tax, but also a 0.3% funding component for the chain. This allows us to fund the community pool, have funds for the oracle rewards pool, L1 Team, L2 spending, and is a 15x increase in our current funding rate from the tax (from 0.02% to 0.3%). The 1.5% tax is not too high but in my view is a reasonable on-chain transaction tax. We have good staking rate, which you can make back the 1.5% tax after only 27 days of staking. If deposits to major exchanges who participate with the 1.2% burn tax off-chain are exempt from on-chain tax, there is only one transaction to withdraw from the exchange to stake, with the transaction back to the exchange to sell being exempt from on-chain tax.
- Why a 1.2% burn tax, why not a 1%?
The 1.2% burn tax is symbolic of the original recovery movement and push for off-chain burns. The 1.2% burn was in my view wrongly removed after 3 weeks. The 1.2% burn tax is well known, Binance and other exchanges know about it since we were pushing for its adoption at the time, and it was once on-chain for 3 weeks. It is familiar to the community, and it is a fair and not excessive rate. We should go back to where we started and I believe the 1.2% burn tax is perfect to push for off-chain burns.
- Why would the exchanges agree to do this? Why don’t you ask them beforehand?
By our united community efforts and persuasion, the incentives of the internal wallet whitelisting and deposits to the exchange being exempt, the offical developer representatives of LUNC reaching out to exchanges (the L1 Team) bring certainty and professionalism, and the private list of agreeing exchanges to our question, with the negotiation before a simultaneous launch, all of these steps are carefully planned to alleviate the concerns of the exchanges of any volume loss, trader flight and stepping out alone. We can ease those concerns by following precisely the method laid out in this Vision Plan. CZ once said that we need the tax on-chain to ask for it off-chain. Also, though I am a LUNC validator, I do not have the authority of the L1 Team in communicating with exchanges (though I can help wherever possible), and a combined community effort that is authorised by governance, is backed by concrete tax changes on-chain, shows to exchanges that we mean business and that we are serious about pushing for the off-chain 1.2% burn tax. All of the steps I outlined are important to achieve success.
- Won’t traders leave the exchanges because of the 1.2% tax?
Any possible issue with this will be alleviated by the simultaneous launch of a consensus of major exchanges. If the majority of volume is captured by agreeing exchanges who will implement the 1.2% tax, there will be little user flight to cheaper exchanges (this was one of the concerns of CZ). Also, the simultaneous launch goes with the feedback given by CZ, that the 1.2% burn tax could work if all the exchanges implement it at the same time. If enough large exchanges agree, we can achieve a simultaneous adoption. This is a very realistic way of achieving our goal. Traders don’t necessarily hold LUNC, they trade a range of coins and go wherever there is high volatility. With the 1.2% burn tax implemented off-chain, there will be huge interest, volumes and price action due to the excitement of recovery of LUNC to former highs. The 1.2% tax will be a small reasonable tax that will not impact them much when LUNC is moving so much, multiplying in value. Only during a quiet period with little price movement will the traders factor in the 1.2% tax more carefully in their trades. They will need to factor in the tax when making a trade, it’s not an overly burdensome request. All who buy and sell LUNC should participate with this fair tax to help us all burn the supply. We also have the same 1.2% burn tax on-chain (with 0.3% added for funding for a 1.5% total). In addition, professional traders are not our first priority, but LUNC investors. If we can get the exchanges to agree and implement the 1.2% burn tax off-chain, we have achieved our goal.
- Won’t this focus on burns and the higher tax destroy utility on-chain?
No, as dapps will be made tax exempt under this plan. Dapps bring important utility and also extra volume to the chain. We don’t need to force them to burn for us by making their contracts subject to our on-chain tax. If they want to burn for us they can do it voluntarily, but dapps are exempted from on-chain tax in this plan. This way our chain can continue to build while we explore off-chain burns and hopefully achieve them. In addition, the 0.3% component of the tax is a 15x increase in our on-chain funding rate from the tax, so there will be a lot of extra funds to fund on-chain development, including possible incentivisation of dapps on-chain, subject to governance.
- Why shouldn’t we go with RedlineDrifter’s USTC repeg plan instead of your plan?
My plan is NOT in contradiction or opposed to a USTC re-peg. My plan is focused on LUNC and burning its supply by implementation of the 1.2% burn tax off-chain. Redline’s USTC re-peg involves complex coding, significant amount of work and time, a special algorithim to be applied off-chain on exchanges, with a lot of factors needing to align for success. It also involves requiring off-chain major exchange participation, like my plan, but my plan is significantly more straightforward. Redline’s proposal is mostly about USTC, mine is about LUNC. They can both proceed at the same time. Also, if Redline’s proposal is rejected by exchanges, they may very well accept the 1.2% burn tax off-chain, because it’s a lot simpler without technical issues and other possible ramifications. I won’t get into that too much, but suffice to say the plans are not opposed, and can operate at the same time.
- What if this plan fails and doesn’t work?
If we cannot achieve significant adoption by major exchanges of the 1.2% burn tax off-chain on buy/sells after 6 months time, this plan is judged a failure, and the tax changes can be rolled back by the community. In the event the plan fails we will be in the same position as we are now.
- What do you need before this plan can be implemented?
Right now I need support from the community and validators, so that when the Vision Plan is put for vote, it will pass by the community. Right now I am sharing the plan, reaching out to validators to let them know about it, and answering questions and explaining the details to increase community awareness. When I feel the community is ready, the first text signalling proposal will go to vote, to bring the whole plan into motion.
- What do you want us to do?
At this stage sharing the plan, reaching out to validators and telling them about the plan, discussing the plan, giving your feedback, all of these things are important for us to proceed further.
Please read over this thread carefully to be across all of the details of the plan. If the vote is successful, we need to ensure together as a community to follow the particulars of the plan, and not allow others to disrupt or ruin the plan by going their own way, but to stick to the plan to achieve the Vision Plan for LUNC’s awesome future.
Thank you for your consideration. I hope that this plan will proceed for vote soon. I will update in this thread when that has occurred.
JESUSisLORD LUNC Validator