Summary
I propose that a functionality be created to allow immediate withdrawal of delegated coins, but with a massive 10% taxation that would go into a burn wallet for immediate liquidation. (The amount of burn tax is subject to discussion).
Motivation
I think there is a huge demand from members for the functionality of faster withdrawal of delegated coins from the validator. Let’s look for a way to allow people to do this for a reasonable “punishment” in the form of a high fee/tax.
Proposal
I suggest creating a “Fast undelegate” button. This button will be displayed when there are any coins that are currently in “Undelegate” status and the user is waiting 21 days for their coins. After clicking the button, the user will be notified that this action:
Instantly pays out all coins from the “Undelegate” state to the main wallet
This event will be charged a tax of 10% of the entire “Undelegate amount”.
The tax obtained in this way immediately goes to the burning wallet.
21 days is simply too much time to respond to market emergencies. Let’s imagine that we would introduce such a tax:
A: Positive scenario - The price of Luna Classic skyrocketed upwards by hundreds of percent. Only people who have “free LUNC coins” can benefit from this “pump”. If we allow users to immediately get their funds from validators, then 10% of this amount will be burned immediately. This means that a rocket price increase in the markets can cause an extremely high immediate reduction in the total supply.
B: Negative scenario - The price of Luna Classic is falling sharply and people are afraid. This fear makes them immediately withdraw their delegated coins and sell them on the exchange (Paper handz…). We will allow them, but they will pay a 10% burn tax. This means that even a sharp drop in the price in the markets can cause an immediate significant reduction in the total supply.
Advantage:
A significant rise or fall in price in the markets can cause an immediate and very large reduction in the total supply.
Disadvantage:
At the same time, this feature can instantly increase the circulating supply, as the coins will immediately enter circulation.
No from me and i doubt anybody want to pay 10% tax to unstake. If you don´t want to lockup your coins and miss gains then dont stake. Or atleast don´t stake all of your coins
Imagine that you have 10 million LUNC in staking and LUNC has increased in price by 100% on the exchange. You use the “Fast undelegate” function, pay a tax of 10% (1 million LUNC) and sell 90% (9 million LUNC) on the exchange. You just made a profit of 90% vs 0%. I can imagine situations where people would certainly be willing to sacrifice 10% of their assets in order to create 90% profit. At the same time, the entire Luna Classic community benefits from the fact that you burned 10% of LUNC and thus reduced the total supply. This feature could help stabilize the price of LUNC. Slightly pause the pump and slightly pause the price drop. The Luna Classic community is looking for the right balance between utility and reducing the total supply. This feature accomplishes both of these goals.
If we do not accept to delegate and have the 21 days to withdraw, we do not stake or we stake using the liquid token of the type Eris Protocol. (ampLUNC)
Just the ampLUNC swap to Lunc and there will not be 10% to pay. But in addition it would help operate the protocols and utility of the chain. On the contrary that being able to delegate quickly even by losing 10% does not help the chain, the channel transactions or the various existing protocols.
So you’re telling me that the Eris Protocol provides utility, but if my function was DIRECTLY on the blockchain, then that’s complete bullshit? How many LUNCs have been burned by Eris Protocol in the last year? Thank you and please do not use this space to advertise for projects that make a lot of money in our ecosystem, but their contribution to the whole community is debatable.
So you’re telling me that the Eris Protocol provides utility, but if my function was DIRECTLY on the blockchain, then that’s complete bullshit?
I wouldn’t go that far, but if I want to be able to get out quickly, I just don’t stake and stay on a CEX, or at worst I use a liquid token.
How many LUNCs have been burned by Eris Protocol in the last year?
It continuously burns some with each auto compute , USTC swap , stake , unstake, sale.
Thank you and please do not use this space to advertise for projects that make a lot of money in our ecosystem
They are far from earning a lot of money because precisely people know them or use them and complain continuously about not being able to unstake all of them right away.
And I think on the contrary that it is important to talk about the utilities that exist and work and that accept to work on the channel.
I think ordinary people would prefer to do such an activity directly in Terra Station. Eris Protocol isn’t bad, but it’s definitely not for everyone. Simply put - most Terra Station users will never use the Eris Protocol in their lives.
Hi. To be honest, I have never seen your post before I apologize that it might look like I am repeating your post. It’s a very good sign for me that I’m not the only one who thinks this way. I am 100% sure that many people would be willing to pay a 10% burn tax. I think that the benefit of reducing the total supply far outweighs the risk of temporarily increasing the circulating supply. I read the comments below your post. The people who oppose this proposal are the ones who have a reason to do so, they are biased and we stand in their way. I think we should join forces and do everything to make this feature happen. I’m on your side. I believe that together we will find an ideal compromise. I will be happy if you are also on my side.
Also :
Ustc should be the main gas.
All transaction fees ( gas )on chain must use ustc.
To be fair and balanced.
$lunc function as a validator.
$ustc function as a gas.
so that there is a clear reason why I bought ustc.
I don’t care as long as the idea is one way or another gets implemented lol half or percentage should go to refilling the oracle pool split half burn half oracle
I constantly receive feedback from various social networks. I can draw several conclusions from this:
There is a huge public demand for some way to speed up coin unlocking.
It is absolutely fair that such an option should be charged and it is absolutely fair that such a fee be MINIMUM 5%. And that is a very critical minimum.
This percentage must not be LOW!!! If it were low, it would allow too much coin to be released at once into the circulating supply, without significantly reducing the total supply. The difference between waiting 21 days and immediately unlocking the coins must be enormous, even frightening, but not usuriously high.
Claims that NO ONE would be willing to pay a 10% fee for instant delegation cancellation are very wrong. It’s simply not true. People would be VERY willing to pay this fee if it was 1-2%, on average they would be willing to do so if the fee was 10%. And that is very good.
The current profitable interest from staking is at the level of approximately 20% per year. This means that by paying a fee of 10%, the user would lose the rewards that he would have earned for the next 6 months. And that’s fair.
There are opinions that it is necessary to divide the tax into the community / oracle pool. I personally do not agree with that. My opinion is that we have to eliminate 100% of this tax and directly into the burning wallet.
This proposal goes in the right direction. More and more people are leaning towards this proposal. It looks like this proposal will soon go to the proper voting system. However, it still requires discussion.
I think the core idea here has some solid merits. I would actually say it makes sense to compensate validators who are going to be potentially hurt by this function. I would recommend giving validators 1%, burn 6% and give 3% to community pool. Burns are great, but we also need funding for development as we can barely afford the L1TF right now. You can mess with the % as you see fit, I just think the 3 allocations will give this a much higher chance of passing and be well rounded to meet multiple needs.
Hi. Thank you for your response. I don’t think validators would be affected in any significant way. It is true that in the case of a sharp increase or a sharp decrease on the market, many people would use the opportunity to immediately withdraw their delegated coins for a high fee and thus the validators would (SHORTLY) lose a lot of delegated coins, but an enormously high burn would cause a significant reduction in total supply and we can also expect a significant increase in the value and price of the Luna Classic. I think that absolutely everyone who is in the Terra Classic ecosystem would benefit from the reduction of total supply. And this is exactly the reason why I am in favor of the entire fee going straight to the burning wallet. Because this is how we increase the real value of LUNC (even if the nominal value remains unchanged). The permanent reduction of total supply, if it goes hand in hand with building on the chain, makes long-term sense overall. PS: Let’s not forget that this 10% burn fee is only paid if the user uses this option to immediately have the delegated coins paid out to his main wallet. He still has the option to use the classic cancellation of delegation and wait 21 days (by the way, I can imagine that we would raise this period to 30 days).
Hi. This is a question for deeper analysis. But we can say with certainty that the staking ratio is 14.669% (bonded: 13.999%). To be exact: 960,317,022,890.118408 bonded / 46,004,730,873.829361 unbonded. (Source: luncdash.com)
Simply put - almost 1 trillion LUNC are locked in delegation. Now let’s try to imagine the worst possible scenario, which is almost completely improbable. Let’s imagine that all these coins were instantly paid out to wallets, so they would enter the circulating supply. This would certainly have a significant negative impact on the ecosystem and also on the price of LUNC. But let’s not forget that at this moment, 10% (100 billion) LUNC of the total supply would be permanently liquidated IMMEDIATELY, which would go to the burning wallet. And I really honestly think that the overall resulting impact on price would be extremely positive. This is why I believe that the instant staking cancellation fee should be AS HIGH AS POSSIBLE and why I believe that everything should go straight to the burn wallet. The higher it is, the more secure the blockchain is. Too low a fee would be extremely dangerous, because the ratio of the increase in circulating supply to the decrease in total supply would be very unfavorable.
But there is another 5 trillion, besides blocked. imagine everything is going well, the project is developing, the price is rising. On some kind of price owners begin to fix profits. Not all at once, of course. But still, pretty massive. Even if the blocked ones don’t come out, 5 trillion is still a big amount. Well, if not all at once, and there will be a demand for each offer. Burning should be used at every opportunity
QUESTION 1 - Is it 10% of all my delegated coins or is it only 10% of the amount I want to withdraw from “Delegated” status to my main wallet?
Let’s not forget that it is 10% from “Undelegations” and not 10% from “Delegations”. This means that you pay a 10% tax only on the amount that you currently want to have immediately paid out to your main wallet. Your other coins in the wallet or your other coins in delegation will remain untouched.
QUESTION 2 - Would this tax apply to all cancellations of delegation?
Not. You would still have a choice whether you want to make a classic coin withdrawal and wait 21 days or you decide to immediately pay out coins to your wallet and pay 10% of these coins, which go to the burn wallet.
QUESTION 3 - Isn’t a 10% penalty fee too much? Wouldn’t 1%, 2%, 3% be better??? Nobody will use this feature if they have to pay 10% tax.
No, it’s not much. In fact, I’m starting to think it should be even more. Maybe 15-20%? Keep in mind that we don’t want this feature to be used too often. We don’t want to get to the point where we allow people to withdraw their coins instantly and for a ridiculously low fee, because in the case of a big pump in the market, a lot of people would want to do that and that would cause instant withdrawals and therefore an increase in the circulating supply. So we actually want this fee to be as high as possible.The higher it is, the more secure our network will be. We need to reach a state where the ratio between the potential short-term increase in the circulating supply in relation to the immediate permanent decrease in the total supply will be as favorable as possible. If the instant delegation cancellation fee were very low, it could cause significant volatility if Luna Classic prices in the market rose or fell too significantly. If you still think that 10% is too much, then imagine a market situation where the price of Luna Classic increases by 300 percent in one day and a massive withdrawal of coins from validators starts. These people would still make an enormous profit by selling on the stock market. For that reason, I think 10% is the critical minimum.
QUESTION 4 - We should distribute the funds obtained in this way for the community fund, oracle fund, validators so that everyone is satisfied. Wouldn’t it be better this way?
Do you know why the price of Luna Classic dropped from more than 100 dollars to 0.00000 ??? Because the algorithm minted trillions of coins during the crash and caused extreme inflation. This is the real real reason why we crashed well below $1. Therefore, let’s not forget that reducing the total supply is more than desirable. I insist that 100% of this tax should go straight to the burning wallet, because all actors in our ecosystem will benefit from the reduction of total supply in the long term. If we don’t finally start properly burning in places where it makes sense, then forget that the price will go up over time. Of course, we also have to build. But people are probably starting to forget that the massively high total supply is currently our problem. The community is strong and thriving. We can talk about the redistribution of funds later, we are currently working fine.
I apologize that it might look like I am repeating your post. It’s a very good sign for me that I’m not the only one who thinks this way. I am 100% sure that many people would be willing to pay a 10% burn tax. I think that the benefit of reducing the total supply far outweighs the risk of temporarily increasing the circulating supply. I read the comments below your post. The people who oppose this proposal are the ones who have a reason to do so, they are biased and we stand in their way. I think we should join forces and do everything to make this feature happen. I’m on your side. I believe that together we will find an ideal compromise. I will be happy if you are also on my side.