Final Vision Plan for LUNC to $1+

Governance & Proposals
44

Actually no. Decentralised exchanges trading LUNC have little liquidity, which can lead to large slippage and losses when selling or buying more than small amounts. Also if transferring to a DEX to trade LUNC you will incur 1.5% on-chain tax to transfer there and sell.

As exchanges who participate in the 1.2% off-chain burn tax have their deposits tax exempt under my plan, when you send your LUNC there you pay 0% tax. When you sell you pay 1.2%.

So actually it’s cheaper to use a centralised exchange that participates in the 1.2% burn tax off-chain than a DEX which doesn’t, saving you 0.3% tax. The exchanges get this tax inventivisation for participating in our plan. Under my plan volume is prioritised to those exchanges who participate in the 1.2% off-chain burn tax, exactly how I designed the plan and as it should be.

2 Likes
45

On the buy side if you want to buy LUNC and don’t want to pay the 1.2% tax people can bypass exchanges who participate and use a DEX (if the DEX does not apply the 1.2% burn tax on buys and sells). The issue with that is on-boarding $ is not easy on a DEX. I think people will accept the 1.2% burn tax without much issue.

For those who want to sell their LUNC it’s cheaper to use a participating exchange by 0.3% (1.2% burn tax versus 1.5% on-chain tax), and for those who want to buy LUNC they can skirt around the 1.2% buy tax if they want to go to a DEX or a non-participating exchange to save 1.2%. That may see in increased volume for buys on DEX, but sells on any exchange DEX or CEX are tax incentivised to participate in the 1.2% burn tax (1.2% versus 1.5%).

So it’s cheaper to sell on exchanges who participate in the 1.2% burn tax (0.3% savings) but costs 1.2% more to buy than using a DEX or exchange which does not participate. I think overall people won’t be fleeing the exchanges to buy on a DEX or non-participating exchange just to save 1.2%. If they stick with their participating exchange, for example Binance and Kucoin if they agree, their sells are 1.2% tax and buys are 1.2% tax. On an exchange who does not participate to move LUNC there and sell is 1.5% tax and their buys are 0% burn tax.

For people who regularly send LUNC to sell on exchanges such as from cashing in staking rewards, they are incentivised to use a participating exchange. As such in my view they are unlikely to try to avoid the 1.2% buy tax by moving to a non-participating exchange.

The other option is if someone wants to buy on a non-participating DEX and they buy and hold on that DEX they incur 0% burn taxes on buy and sell. But they cannot stake and are required to hold their coins on the DEX which has security risks in doing so. I just wanted to go over these options clearly for clarity to show the effect of changes under this proposal.

Overall due to the tax incentive when selling on participating exchanges due to deposits being exempt from the 1.5% tax, I personally don’t think we will see a big flood of people trying to avoid the 1.2% buy tax.

I believe this proposal will be amazingly successful if implemented. As I described above the final step after getting major exchanges on-board is getting as many others on-board as possible, and they can receive the same benefits (internal wallet whitelisting and deposits to them exempt). This gives a good model to encourage participation across all LUNC traded markets, so we can have as much traded volume as possible with the 1.2% burn tax. This incentive to participate model is the best.

4 Likes
46

While I understand the motivation behind this proposal, I see several potential issues with the idea that could outweigh its benefits:

Market manipulation concerns: Implementing a 1.2% burn tax on buys and sells could make the market susceptible to manipulation. Traders could potentially exploit the burn mechanism to artificially inflate the price of LUNC.

Disincentivizing trading: A 1.2% burn tax on both buys and sells could discourage trading, as investors may see the tax as a barrier to entry or a loss of profits. This could lead to lower trading volumes, reduced liquidity, and decreased overall interest in LUNC.

Unfair distribution: The proposed tax may disproportionately affect smaller traders, as the burn tax would apply to all transactions regardless of their size. This could result in a less equitable distribution of LUNC and hinder widespread adoption.

Limited utility: Focusing solely on burning the supply to increase the price does not address the underlying issue of utility. To achieve long-term success, LUNC needs to have real-world use cases and value beyond its price appreciation. A focus on utility could attract more investors and lead to a sustainable price increase.

Community division: The proposal has the potential to further divide the community, as not all stakeholders may agree with the plan. A divided community could reduce the project’s overall effectiveness and hinder its growth.

Dependency on exchanges: The success of this proposal relies heavily on the cooperation of major exchanges. However, there is no guarantee that exchanges will agree to the proposed burn tax, making the plan’s success uncertain.

In summary, while the proposal aims to increase the value of LUNC through a burn tax, it may create more problems than it solves. A better approach could involve focusing on the utility of the token, attracting more users, and developing real-world use cases to create sustainable growth.

3 Likes
47

No with Veto !

1 Like
48

That’s clearly not true.
There’s one meme chain with 10/10 sell/buy tax that is seeing growing interest and is competing with TC on mcap.
Users? 1.73m by last count

If you have a tax of 10% - you’ll be in profit on gains of 11%.

Same as with this tax.

*I’m not in favour of this proposal, but outright biased untruths aren’t also my favourites.

2 Likes
49

In that case, I’m at peace.

1 Like
50

A fantastic plan. Clearly you have done the maths and are a very experienced crypto trader.

What I love about the vision is that the community is the foundation here and I do hope the majority will support.

Getting the message out there will be the spark lunc needs!

There’s fundamentally nothing wrong with the token but like you said it was the stable coin tusd that failed this project.

I am 100% behind your plan. Let’s go!

3 Likes
51

I appreciate the detailed response. I will address the points you have raised.

Market manipulation to exploit the burn mechanism to artificially raise the price? I don’t really know what you mean by this. Anyone who buys and sells is taxed 1.2% which is collected for burns on each transaction. The flat tax is integrated into the buying and selling just like exchange trading fees are. Also the proposal aims to attain consensus across major exchanges so all LUNC markets are on the same playing field.

Your point on disincentivising trading I don’t agree with and have addressed several times. The positives of burning massive amounts of LUNC and the interest and price movement this will bring will ensure massive volumes and price movement. The hype will be immense. Traders will profit greatly from the rise. Only during periods of low volatility will the 1.2% tax be a factor. They will need to factor the 1.2% buy and 1.2% sell tax into their trade. But by the time we even get to a low volatility period, the price would have risen so much and interest grown it’s likely our community would rapidly increase in size, our market cap would go way up and we’d have an overall higher volume baseline. If all exchanges applied the 1.2% burn tax on buys and sells tomorrow, people have the mistaken view that the price and volumes will stay roughly the same and nothing will really happen. This is so far from the truth. The hype of LUNC’s recovery will be immense. To put it in another way, while decreased volume could occur during periods of low volatility due to traders needing to factor in a 1.2% buy and 1.2% sell, the overall price, burns and increase in baseline volume due to price sentiment, market sentiment, hype for recovery will far outweigh any negatives there.

Regarding unfair distribution, 1.2% flat tax is the most fair tax. If you have $100 you pay $1.20 tax. If you have $1,000,000 you pay $12,000. I personally believe a flat but low tax rate is the most equitable and reasonable taxation.

Regarding limited utility this plan does not stop utility but utility is tax incentivised with tax exemption, also we have a 15x increase in the funding rate from the tax so can afford to incentivise a lot more utility on-chain. Utility can proceed while we push for off-chain burns. Burns + building is better than building alone or burns alone.

Community division, yes some in the community support burns and others want to push for utility. We’ve had 6 months on the lower tax of 0.2% after removing the 1.2% tax but we did not get the promised volumes, burns or utility. My plan let’s us incentivise and fund utility and the chain but let’s us also pursue off-chain burns and reduce our hyperinflated supply. I am also not rushing to vote with this proposal but working on getting more community support. My prior thread was up for over a month and I will give sufficient time for validators and the community to consider this. I don’t expect unanimous support for this. If my proposal passes I will proceed forth as I have stated here. If people disagree or do not vote for this proposal I ask they keep their peace and not try to sabotage it, and let us fully explore it if my proposal passes governance for the allotted time I am asking of 6 months. If in 6 months we cannot obtain significant 1.2% burn tax adoption off-chain on major exchanges I will declare the plan a failure and we can roll back all the changes. This is a plan to really explore off-chain burns but if they don’t work out after 6 months we can reverse the changes. During the 6 months we can push for off-chain burns and have tax exempted utility on-chain and more money to fund them and our chains needs.

Dependency on exchanges yes we require them to participate in this proposal, and I have prepared methods to incentivise them to agree and by united community pressure I believe we can achieve it. I gave a more detailed explanation of my answer to this at the above question in the original post " Why would the exchanges agree to do this?"

Overall the previous push for off-chain burns was cut short after 3 weeks. My plan here has a credible path to achieve them, I am asking for 6 months to work to achieve it together with those who want to participate in the community. If it fails so be it I will admit that if it doesn’t work out. But if we succeed the rewards are great. If the vote does not pass, we are in the same position and there will always be division from people like myself who believe the community should give the off-chain burns a proper shot. My Vision Plan is one I believe we can achieve the goal. These are my responses to your feedback. You are welcome to your own view. Thank you.

3 Likes
52

I understand that the burn mechanism is intended to be integrated into the buying and selling process, much like trading fees, and that you aim to achieve consensus across major exchanges to ensure a level playing field. While this might help to reduce the risk of market manipulation, it is essential to remain vigilant to potential abuse.

Regarding disincentivizing trading, it is true that the hype and potential price increases could encourage trading and offset the impact of the burn tax. As you mentioned, the 1.2% tax would only be a factor during periods of low volatility. However, it’s still worth considering the potential long-term effects of the burn tax on trading behavior.

As for the point on unfair distribution, I understand that a flat tax rate can be seen as equitable. The concern was more about how the tax could disproportionately affect smaller traders in terms of their overall investment. However, it is ultimately up to the community to decide what they deem to be fair and equitable.

I appreciate that your proposal does not necessarily limit utility and that tax exemptions can be used to incentivize on-chain utility. It is essential to strike a balance between burns and utility to ensure the long-term success of LUNC.

Regarding community division and dependency on exchanges, it is commendable that you are giving ample time for validators and the community to consider your proposal and working towards building consensus. If your proposal passes, it is crucial to have a united front and work together to achieve the desired outcome.

Your Vision Plan does present an interesting approach to addressing the issues faced by the LUNC community. It is crucial to keep an open mind and give different ideas a fair chance to succeed or fail. While there might be disagreements, the most important thing is to maintain a healthy and constructive discourse within the community.

Once again, thank you for your thorough explanation, and I wish you the best in your endeavors to improve the LUNC ecosystem.

But I’m a NO on any tax increase prop, sorry.

1 Like
53

Centralized exchanges have introduced a tax, good.
Do you transfer tokens to a centralized exchange in your wallet - pay tax? Yes, you pay tax.
You sold tokens on a centralized exchange - did you pay tax again? Yes, you paid tax again.
When you connect a wallet to a decentralized exchange, you DO NOT PAY tax.
You only pay tax when trading on a decentralized exchange.
So, in order not to pay twice the tax, many will trade not on centralized exchanges, but on decentralized exchanges.
Now it is clear?

54

You connect your wallet to a DEX to sell? I wasn’t aware of that. Right off the bat I would never be comfortable doing that with my holdings, as you would have to rely on the DEX’s safety for your entire wallet, which could be compromised, unless you made a new wallet just to use the DEX. There is a reason people keep their coins in a wallet for safety off exchanges. Connecting your whole wallet to a decentralised exchange seems like something very few people would do IMO.

Most people will not ever take the risk of connecting their wallet to a DEX. So in my view due to this reason and low liquidity there is unlikely to be a big exodus of users from the exchanges to DEX’s if they adopt the 1.2% burn tax off-chain.

Aside from a DEX, if any exchange that does not participate, then what I said earlier stands and it’s cheaper to move your LUNC to a participating exchange to sell, as it’s 0% to transfer on-chain and 1.2% to sell. Whereas a non-participating exchange would be 1.5% transfer and 0% sell. So overall a 0.3% discount when moving your LUNC or staking rewards from Terra Station to a participating exchange.

@Lunanauts thank you for the response and for sharing your perspective.

3 Likes
55

I just plug the wallet into a DEX to sell and move the money to a place where it is more profitable otherwise I would keep it in a CEX and sell and buy there.

56

People can use a DEX but it’s not likely to take much volume from the CEX’s who participate in the plan in my view. If you’re selling a higher amount of LUNC you may have liquidity issues. What DEX currently has LUNC you can buy and sell?

57

Do you know what is a DEX??? Have you ever heard of liquidity providing??? Do you know the basics concept behind self-custody?!?

2 Likes
58

I haven’t used a DEX before, as I assumed you made an account (non KYC) and it involved on-chain transactions to send LUNC there. I didn’t realise it was a direct wallet connect. Please tell me which DEX can you buy and sell LUNC on? The only DEX I was aware of dealing in LUNC was Terraport. It’s not difficult to understand liquidity on a DEX is not going to be as good as a CEX. Yes I know about self-custody.

59

There’re three working Dexs on Terra chain terraswap, astor and loop

2 Likes
61

Okay thank you I was only aware of Terraswap and Astroport by the swap function which I use in Terra Station for USTC to LUNC, I didn’t know what else they offered I am looking into it more.

1 Like
62

Hi everyone I want to make a few things clear going forward if the community approves this proposal:

(1) I will be intending to take an oversight and consultative role along with the L1 Team in their reaching out to exchanges and making the offer, incentives and question, for the purposes of fulfilling this plan. This will ONLY be in relation to this Vision Plan and its particulars which passes governance, and its fulfilment, and not other activities.

I will do what I can to ensure all is going smoothly and according to plan. I ask that as the proposer of this plan I am given authority by this proposal, if the community approves it, to be privy to the negotiations and status of the plan at all times, so I can maintain oversight of the plan and ensure its faithful completion and that the particulars are adhered to, and to communicate with the community what information is appropriate, as to its progress. I believe this will be most suitable. I will communicate with the L1 Team regarding specifics if this proposal passes. I have already reached out to them to let them know about this proposal.

My proposal will specifically authorise L1 Team involvement to assist. I believe it’s best I work together with the L1 Team in doing the steps in the proposal, so I can provide an important oversight of the process, give suggestions, and ensure all is going according to plan. I have stated in the original post “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.” This is a further explanation of the exact role I will take. It will be worse for our prospects of success if I sit on the sidelines and am not directly involved in the process. I will do all I can to achieve the goal of this plan with the L1 Team and the LUNC community.

(2) If the community approves this plan in the governance signalling vote 1, and the tax changes are made in governance votes 2, 3 and 4 (the plan is not fully live until we make the on-chain tax changes) I will set some guidelines for the community on what I intend for their role to be under this plan. This plan has an important focus on everyday members of the LUNC community. If these changes pass I ask all who feel led to reach out to exchanges, to let them know about the Vision Plan, and ask them to apply the 1.2% burn tax off-chain on every transaction, on buys and sells. Tell them about how great it would be. Tell them they will be tax incentivised for investors to move their LUNC to the exchange when they sell (0% on-chain tax on deposits and 1.2% burn tax on sell, versus 1.5% on-chain tax for deposits to exchanges who don’t participate, a 0.3% discount). Ask them politely, ask them continually. Pressure and continual asking is good, but keep it positive and not overly demanding. Do not go into boycotting or blacklisting, that is counter-productive. Our goal is to convince exchanges to agree by the incentives we offer in this plan AND by community support and positive pressure.

As I requested, I ask for 6 months within which to fulfil the plan. I don’t expect exchanges to agree right away. While the L1 Team and myself will assist to reach out privately to exchanges, the community has an important role in showing exchanges that they are willing to accept a 1.2% burn tax for all LUNC transactions on their exchange. This helps the exchange know their LUNC customers agree to this plan and agree to the off-chain 1.2% burn tax for the good of all LUNC investors and its recovery.

Be active on Twitter, Youtube, polls, competitions, whatever creative way let the community help convince the exchanges to accept the 1.2% burn tax off-chain. Let’s work together and support each other. Let them know we also have the 1.2% burn tax on-chain, so we are committed and hope they reciprocate.

The only rules I request as guidelines to the LUNC community are: be persistently positive and earnestly requesting, not overly demanding and negative. Don’t do boycotts or blacklisting. Please self-enforce these guidelines as we do not want to sabotage our goal.

Earnest requests and a level of nagging is exactly what I want to see, continued and sustained over a period of time. Not just a few weeks and give up, but months and months all the way up to 6 months if we need it!

The LUNC community is strong when united together and can achieve great things. We could very well achieve the goal quickly, we do not know! So these are my requests of the community if this proposal and the tax changes pass, to abide by these guidelines.

(3) This proposal is still in the phase of building support from the community and validators. It will not go for vote immediately. Validators need time to consider the proposal, and the community needs to want to commit to this plan. I don’t expect unanimous support in governance or from the community. But if my proposal passes, I ask those who vote NO or disagree, to please keep your peace for 6 months and not try to sabotage the plan. Give us the 6 months to give all our efforts, and I invite all the community to support the plan in any way they can, even if they voted NO on the proposal, out of respect for governance and giving this plan a fair shot.

If we keep positive and focused we have much more power. Please also ensure that people do not go their own way and try to sabotage the proposal by changing the plan on their own. We must go according to this carefully designed plan, which I believe we can achieve, which is why its important I take an oversight role to ensure that if all goes well, it will be faithfully completed according to LUNC community governance.

Thank you. Christopher.
JESUSisLORD LUNC Validator.

3 Likes
63

Non enforceable.

64

Yes I know it’s not strictly enforceable Tonu, hence I said “I request as guidelines”. As the proposer I am setting the example of what I believe would be good conduct when the community requests of exchanges. People are free to make their own decisions and this was a request and guidelines for what I believe would be most successful. The community can also call out unproductive behaviour in this regard. This is also planned to be written into the voting proposal itself when it goes up so if it passes governance the community by passing the proposal would have agreed to those guidelines. There is value in this and it can help the community as a whole to keep on track and avoid counter-productive behaviour.

1 Like