It’s a yes for me
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I don’t think there is anyone who likes to have the tokens locked for more than 20 days, that’s why many prefer platforms that offer fast undelegation.
This could be a cause of the reduction in transactions and not only in Luna, at a general level.
There is a brake on the economy because the Euro has fallen below the dollar, so when exchanging currency in an exchange there is a significant loss of capital that could be invested in cryptocurrencies.
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That is not the point I made. No one is exploiting anything. My point is that the 1,2% tax was originally intended to only burn Lunc and if anyone wants to allocate a percentage of the tax to any other purposes, it should be thoroughly discussed by the community, which was not . This was not in the signal proposal. This was not discussed. The proposal went live to vote without proper input from the community. And because of that, this must not be used as an argument to change the tax.
Thanks for your honest and level-headed discourse, been a little hot-headed lately. I will talk about this with Akujiro and note it for future proposals since it’s already up.
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While we are discussing about the burn rate, there are some issues which we need to think about as well.
While some CEXs have been actively participated in the burn effort, there are many other CEXs which are not even supporting and the effort from the community to get them to support our burn efforts, seems to be waning.
Also, there are some loopholes in the CEXs, like Binance Convert Function which conveniently bypass the burn.
The community needs to look at fixing these leaks as well.
the data is unclear after review. there is the false positive month of september and we hardly have any real numbers. i propose a 90day window from Oct 15 to Jan 15 where we see the effect of the tax burn. it was voted in by the whole on-chain and the whole community. it is a joke if we remove it so fast. after Jan 15 we should make the decision based on data. its possible that volume may normalise. it may not. but rushing into it so fast when we already had previous consensus does no good to any body.
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The volume in September was going crazy with the possibility of a #lunc recovery that dropped to zero… you look at the volume before the boiler, this is the truth… Do you really believe that??
this proposal is a scam mindset. when Binance sent 6.5B to the burn address they paid 68 M lunc as tax burn fees. Now the issue with Akujiro proposal isn’t lowering the tax to 0.2 no it is the 10% being deducted from each burn trans being targeted by 10% as funding for " ecosystem infrastructure and contributors " here is the key word! Who is the contributors specifically? Beside TR team. and funding “ecosystem infrastructure” also is vague… now let’s get back to binance imagine if they knew that what they send as " tax burn fees " that comes from the process of what they are sending as trading fees weekly to the burn address will be targeted with 10% for funding regardless of who will be benefitted from 10% , do you think binance will keep burning? Binance is not a charity! Someone will gaslighting me and say but cz said lower the tax will burn more ok fine but he didn’t say that 10% which is being deducted from the tax burn fees will be sent for funding
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This proposal will target binance transactions fees that occurring due of each batch they send to the burn address weekly which cz will not accept that mostly … they burn for free and you want them to fund contributors , Validators and the infrastructure of lunc ecosystem?
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Just take the vote then… If it is as you say then the vote will fail. no harm no foul…
I own a sizeable bag, and I am defo okay with paying 1.2% lol
This Twitter post referenced the exchange trading volume as determined by Messari.
Simply wrong set of data.
On-chain performance surrounding the 1.2% burn tax implementation is as clear as day.
The market anticipated the 1.2% go-live, and conveniently sorted out everything (volume peak) prior to it.
Now you see this straight flatlining of the on-chain volume. Over 90% volume wiped out.
Defender of higher tax, needs to explain how did Binance contributed overwhilmingly higher $LUNC burn amount with a merely 0.1% tax off-chain.
The open secret is volume. Volume has always being the secret sauce. A strong base number is going to determine the final result of a tax.
It is never the other way around, at least not in the long term. This is why we need to defend on-chain volume for maximum burn in the future.
In real life, everybody knows that when the governance raises tax, businesses will leave, and people spend less. Therefore higher tax rate often negatively impacts growth and in return the government actually collects less tax. This is the same point narrated by CZ in a recent AMA. Remember, the man burned millions of US dollar of his own money, for the LUNC burn project, at least give the man some credit for his honest concern of $LUNC.
This is the same when it comes income tax. You could double the income tax rate for the mega rich, but what will happen is that they will just leave and go to a lower tax jurisdiction. The exact incident took place with LUNC on-chain volume.
This is nothing new, human nature and the herd mentality works the exact same way both online and offline. Nobody asks for higher tax in real life. But what happened to the LUNC community here is really interesting, the obsession of “burn only cult” made some people willfully ignored the obvious negative side effects of high tax.
If you invest in Tesla stock, would you ask Elon Musk to raise price on electric vehicles?
If you invest in Apple stock, would you ask Tim Cook to raise price on iPhones?
No, you wouldn’t. The priority should always be to make the best product available. And with time, the free market will naturally reward the most competitive company and its investors.
So why are LUNC holders requesting the 1.2% tax to be lowered with an improved policy on savings for future development? Because we want to make $LUNC the most compelling PoS chain out there.
This is the only route towards survival. Nothing else.
The bad point is that if the proposal does not pass, the contributors will still not be paid.
You are not going to get the same volume on-chain as off-chain. 
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Raise taxes and burn.
Yes. We are not going to get the same volume on-chain vs. off-chain next day. But, that doesn’t mean you can take short cuts and try to play tricks. This is like cheating on a test. The blockchain business is fully transparent to the entire world. While everyone is watching, where will this behavior get you?
Volume (V) x Tax Rate (TR) = Burn Amount (BA)
V x TR = BA
The Tax Rate (TR), has an one-way inverse relationship over Volume (V).
The higher the tax, the lower the volume. This works in life. This works in crypto.
Believing that a high TR won’t negatively effects V is wishful thinking.
By keeping a high tax rate at 1.2%, what we are saying essentially is that, since our goal is clearly BA, burn as fast as possible, but because we can’t magically increase V, we are going to allow TR to run wild.
The market saw this coming from a mile away, which is why on-chain volume peaked right before days impending the 1.2% tax go-live on Sept 21, then flattened in no time right after the implementation.
So here is what we can learn from this:
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People will do everything to avoid high taxes, they will either try to front-run it,
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Or, they could just store their wealth in another blockchain.
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Of course, we want neither of that.
V x TR = BA
Now back to this very important equation. The Terra Classic network is at a crossroad here.
We need to make an informed decision:
- Keep a high Tax Rate (TR), at the cost of making the chain uncompetitive, upproductive, and expect new comers to pay significantly higher taxes than the whales who succeed in front-running.
- Lower the tax rate to a much sensible level at 0.2%, and work on increasing the one and only sustainable factor of the equation: Volume (V).
The fact of the matter is, you can only ever increase so much in tax. With the 1.2% Tax Rate (TR), we succeed in destroying over 90% of prior volume. It is just human nature to seek the cheapest, most efficient blockchain network.
However with Volume (V), there is no limit to how much volume is possible. SKY is the Limit.
You all wanted to burn down trillions of LUNC.
You all wanted to 10x, 100.x, 1000x your investment.
- Since, V (Limitless) x TR (Barely increases) = BA
- Plus, the Tax Rate (TR), has an one-way inverse relationship over Volume (V).
Here is your chance to actually make it happen:
- Reduce tax. Support developers. Vote YES on proposal #5324.
- Make the chain more attractive to users, which increases Volume (V).
The volume in September was going crazy with the possibility of a #lunc recovery that dropped to zero… you look at the volume before the boiler, this is the truth… Do you really believe that??
The volume in September was going crazy because it is likely all the CEXs knew the tax was going to kick in, so they sent it all off-chain. If you are going to take that data into account, you have to adjust for its skew on this account
The bad point is that if the proposal does not pass, the contributors will still not be paid.
This is something that @Eslam has missed when passing over the code parameter changes. The money goes to the community pool == community decides how to divvy up the 10%
Who is the contributors specifically? Beside TR team. and funding “ecosystem infrastructure” also is vague… now let’s get back to binance imagine if they knew that what they send as " tax burn fees " that comes from the process of what they are sending as trading fees weekly to the burn address will be targeted with 10% for funding regardless of who will be benefitted from 10% , do you think binance will keep burning? Binance is not a charity! Someone will gaslighting me and say but cz said lower the tax will burn more ok fine but he didn’t say that 10% which is being deducted from the tax burn fees will be sent for funding
- Contributors in my POV == devs who have put in thousands of hours to implement this tax change, but again, since it goes to community pool, you guys will decide as you will see your yield increase since you’re keeping 10% of revenue instead of burning it. you can write a prop or wait for someone else to do this if this vote passes
- Binance takes 100% of its LUNC trading fees and writes it off as a loss. I wouldn’t defend the 1.2% tax from that standpoint. He is servicing at least 9 digits worth of volume, more than our crippled chain can right now, and then taking $0 home from it. He is literally doing charity
Additionally, Messari volume accounts for CEX trading and the blue area line graph represents what Messari thinks is wash trading volume. You need to use on-chain volume to pinpoint how effective the 1.2% tax is. Its implementation was a “sell the news” event so you would see more volume on CEXs because of it
Anyways, it is becoming increasingly obvious to me that there are a million other ways for people to get what they want out of this chain if they let go of the 1.2% tax. Most decent feedback I’ve gotten since the proposal has gone up has been “ok maybe it looks bad since we change so soon,” but if a startup doesn’t have product-market fit, they don’t ship their product they know won’t sell, they pivot and sell a better product. I recommend people watch Dalton Caldwell’s video on pivoting for Y Combinator in this regard: Dalton Caldwell - All About Pivoting - YouTube
@Muscularman, people who are against this proposal (me included) are not defending the 1,2% tax, we are against lowering it NOW. And this makes all the difference. I think the majority knows that people tend to avoid taxes and this drop in volume was expected. And people accepted this as a new baseline volume that we are currently operating in.
And since we do not have enough data to set a tax level to optimize the burn-rate, we are against changing the tax. Simple as that.
Using your real-world examples: if a government has an income tax of 15% and lowers it to 1%, people will appreciate that. But, a week later, the government announces a rise to 10%. People will complain. Because of that, the government lowers it to 9%… You get the idea… Down the line, it is always hard for people to accept a rise in taxes, than to lower it. That’s why I think this is a bad proposal: not only it is a PR joke to change a tax level that took months to implement, only to change it a week later, but a 0,2% tax is as arbitrarily as 1,2% (as we don’t have enough data).
Another thing is this 10% allocated to finance the ecosystem: I am against it IN THIS PROPOSAL. At least for me, this should be a different proposal: I think everyone agrees that the Terra Rebel team should be financially compensated, but using this 10% to lure people to vote for this proposal (this 10% was not part of the signal proposal) is dishonest. This is pure manipulation: probably there are people who are not certain about lowering the tax (who probably will not vote or would vote “abstain”), but because @Akujiro added this 10% part on the same day that the proposal went live, people would feel compelled to vote “yes” just because they want this 10% part.
Lastly: I agree that the 1,2% is hurting the chain, but proposing to change it at this time is arbitrary: by the end of the month, new validators will be able to join. Soon enough, IBC will be re-established. There is also the reppeg-plan of USTC. All of this can boost volume.
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People needs to get used it first, however no one is paying 1.2% burn tax at the moment as long as i know, Binance is only paying 0.1% through fees and not charging burn tax to users.
If everyone was paying 1.2% burn tax then we would have burnt at least 100b lunc by now. but no one is paying burn tax, may be one or 2 exs.
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True. Drop in volume was expected by some people, but I don’t think this consequence was ever really discussed in depth. It probably wasn’t even communicated enough to voters, I could be wrong on this but that is the impression I have from recalling the sentiments from last couple months.
However, as explained in this reply (link below), that any tax rate low or high, but higher taxes especially, is meaningless without a strong base volume. At the current rate of burning, we will never achieve our goal of 10B coins. Some will say, this is why we need to give it more time. I think that is very WRONG. What we are really doing here, is sacrificing user experience, and potential development in utility for some meaningless short term burn results. It might hype up the community from time to time. But as a project we remain to be inefficient and unattractive to the outside investors. And I don’t think we are putting enough emphasis on these potential new users. Many in the community seems to think HOLD & BURN is the solution to everything. But it is IMO that, if LUNC will ever have any chance of rapid growth (burn results, utility, price, everything), the userbase of LUNC will be the crucial component. Which is why we MUST protect on-chain volume.
Like I mentioned many time before. Everybody is in favor of burn myself included. The question is at what cost. Right now we are paying way too much for too little gain. IMO just a bad deal to carry forward any longer.