Lower the tax rate to encourage higher on-chain volume

some people might have their own hidden agenda in here. If you want to burn 6.9T within 3 years then we must apply 1.2% burn tax on every single transaction or forget about it.

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What gives the confidence that having a lower tax rate will boost the on-chain volume?

Think it’s more worthwhile to try get more utilities into the ecosystem than to try lowering the tax rate.

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There is an site who have api to true randomness (random dot org), using that service we can be more faith, in addicton to the source code of app must be open to every one who wants see how it works. I can develop it in about 3 months, but the real problem is, the owner of this app must be an leader of the community, in this case teh community will trust it…and is not about make money, is about grow the burn system, all community have engaged with #burnalot and its was only send to burn adress, this app will make more people came, interested in make money but will find an community angaged to grow an project. That is my oppinion, but you rigth in generally “trust” is the main problem.

What if someone controls that atmospheric noise for their own gain?

Random numbers should not be generated with a method chosen at random. --Donald Knuth

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Revitalizing Stability Design

To attract utilities ~ we desperately need a completely new core design of Stability… Something that will shock & awe potential bad actors and impress the whole crypto-community… Something with the simplicity of Gold… :moneybag:

Technically oracle providers like Chainlink can provide VRF inputs for dApps.

This proposal will be written and posted up here by the 10th of October (Monday), under Akujiro’s name.

@Passerby

What gives the confidence that having a lower tax rate will boost the on-chain volume?

Nothing, per se, but the tax has most definitely harmed what little we do have. We are pretty much defaulting to Terraswap, and that’s it. I would like to fund more on-chain dapps/utilities, but it is a chicken/egg problem: lower tax rates would encourage businesses to build on there who are not in agreement with the burn narrative (of which there are few measurable statistics/goalposts). Overall, it makes that aspect of negotiation easier. Otherwise, I have to convince people that 1.2% burn tax going to LUNC holders only (and not even the devs) is a worthy sell. (By the way, this is a very hard sell. It can be done, but I’m not keen on doing it for multiple reasons, disingenuousness as the first one.)

@Pascal

Please include the following thought into your proposal. Reconsider the tax rate to include a component for our DEV team, so they can finance the TR roadmap and keep the needed DEV’s on board.

The revised proposal will include a 0.01% apportionment to fund at minimum the LCD endpoint requirements. This is a number suggested by Ed if we are to propose a reduction to 0.2% effective tax rate. If you are willing to apportion more, we can change this parameter.

@UteXvg @GERALDGERALD

The rewards highly depend on volume. The oracle pool lost it’s funding source mint/burn tax when this was disabled for LUNC.
Currently around 25-30% of rewards come from transactions (depending on volume) while the rest is draining the funds from oracle pool that were generated during capitulation event.
Also transaction fees fill the community pool which will be very important in the future to have it filled with a good amount of coins. So really, transaction volume on chain matters. Not only for burning.

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I understand the idea behind the proposal. 1.2% tax add up quickly, 4 on chain transactions and you lost almost 5% of your coins. Nobody likes that. So it reduces the use of the chain.

I also understand everyone who opposes reducing the tax. There is still not a lot of data about the 1.2% tax burn and on chain volume might pick up in coming weeks (but as some pointed out, most likely not, as dapps volume only accounts for a very small % of on chain volume). Also the proposal assumes on chain volume will pick up, but who knows if cex’s are gonna use the chain again (as was pointed out, most on chain volume was coming from cex’s) now that they already implemented other “workarounds”. Than there are the worries of “bad publicity” by reducing the tax, when it has been just implemented with a lot of social engagement.

I have thought about it myself a long time, because my instinct and emotions immidiately say no, when reading about tax reducing.
But to be honest, even with on chain volume of 150B lunc daily, it will take over 10 years to burn down to 10B with the 1.2% tax only. So i know the 1.2% tax is not the answer to that. And i know some other ideas/proposals are coming for this (burning).

So is it really a big problem to lower the tax to 0.2%, if this might increase use of the chain. It might not get back to previous hights, but at least the chain stays attractive for future investors/dapps. Because in the end, who wants to lose 5% of its “investment” in 4 on chain transactions, not me, not you, i think.

Its always easy to ask of others who are using the chain to pay 1.2% tax, and to have your coins staked or sitting somewhere without moving (as most of us have most likely, like me).

So i think indeed, it is better to lower the tax to a much lower level. Is the 0.2% the sweet spot, who knows? It can always be changed again.

And btw, the proposal goes up on the 10th, voting ends a week later, so we still get almost 10 days of additional data before finally making a decision.

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Small addition:
I also saw a comment about the 1.2% tax keeping stakers, and with a lower tax they might leave.
I personally dont think that the tax matters at all (to a certain hight, if it was 10% or higher, but not at 1.2, or 0). I think the 3 weeks undelegating is what keeps the stakers and the high yield.
I personally wanted to sell when it was at 0.0006 to rebuy at lower levels. But it didnt, because i staked all my coins. So i think, anybody only wants to sell if they have very high profits and then a couple % tax doesnt matter, but the 3 weeks undelegating does, because you dont know what the price will be in 3 weeks with this volatality (or even in "normal circumstances), so you keep your coins staked and earn a garuanteed interest.

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and i “NO with Veto”

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This is a good proposal. However greedy people won’t agree with it. They though 1.2 burn faster. Only if they know how to use math properly will agree with this.

We should seriously consider burning all staking rewards…

Instead of increasing the supply in our wallets, we would be increasing the value of what’s already there ~ so, staking would still have reason and value…

@Akujiro

What do you think about:

A sunset clause for the tax in 12/18/24 months.
A review every 3/6/9/12 months to consider how good the tax is or where the tax is going.
A review on 7th December, findings published on Agora on14th December and vote on 21st December on long term viability of tax.

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No with Vito! Be aware of the hidden agenda behind lowering tax

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Is the proposal up already? Can’t seem to find it.

I always thought between 0.1 to 0.5% was reasonable. IMO 0.2% is definitely good as it feels like “double trading fees” on CEXs, which is psychologically acceptable for most people. Intuitively, there is no doubt that a lower tax would boost volume.

I just have one wish - how to convince all CEXs to implement a 0.2% if ever this proposal did get green lighted…what can members of the community do to help (except from voting).

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Never. The statistics speak for themselves. And the burning of tokens goes full sail
Proposal will be no with veto

It hasn’t even been a month yet .

Yes, proposal is up and can be voted on.

5234 | Parameter change proposal | Voting
Lower the tax rate to 0.2% and set aside 10% of tax revenue to finance ecosystem infrastructure and contributors

Submitted 16 hours ago

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Move forward with 0.2% tax rate and grant program to attract utility on-chain. :tada::tada: