Lower the tax rate to encourage higher on-chain volume

Governance & Proposals
50

Whats the guarantee that the volume will increase after reducing the tax burn?. Its not about being greedy but nobody would even wait 4-5 years for this to get back to lowest supply.

I believe its the market really bearish and every crypto has been affected by it. Also its too early to conclude that tax burn data is accurate.

If we want to burn all supply in one year then we have to burn everyday minimum 20 billion lunc, if in 2 years then 10 billion daily, if 3 years then 5 billion daily. just count how many lunc you have to trade everyday to achieve that daily burn number with 1.2 % or 0.02.

what new utilities, products and partners are we going to get in the future for lunc to attract more investors and increase trading volume. We should work on that as well.

4 Likes
51

We need to focus on designing and coding above profit! The profit will come as a result of what we build, not just how much we burn.

4 Likes
52

The immediate results from the burn tax have been underwhelming, however, the sample size is too small to draw definitive conclusions.

Months of development work, validator outreach, and community organizing went in to implementing the burn tax and bringing it to life. Are we going to reverse course after only one week? A week plagued by unanticipated bugs?

More importantly, the on-chain burn tax was critical to encourage tier 1 CEX’s to implement a burn. After an initial backlash, Binance is now leading the way for other tier 1 exchanges to implement a burn. We cannot rely on exchanges to save LUNC, but the real volume is on the exchanges and we need their help to make meaningful burns.

The LUNC ecosystem is also still very fluid. Projects and devs are circling the chain evaluating the opportunity to service LUNC community demand. New validators will be allowed to launch at the end of October. The community continues to be vocal encouraging CEX’s to list and burn. There is a lot still evolving.

It is too early to tinker with something that took so much time and sacrifice to launch. Alex wrote on medium that until the COSWASM and chain dependencies are upgraded, we have a window to experiment with the tax. This is all an experiment, LUNC was abandoned and revived with an unprecedented effort and community. We should allow some time and collect more data before making changes to this monumental achievement.

6 Likes
53

A proposal for the reduction of the burn tax to 0.2 with 5% allocation to the community pool for LUNC and a 0% burntax for USTC will go up on the 10th of October 2022!

Until then we will watch every day carefully, collecting data and make our calculations.
10 days are imo way too many but this gives us enough time to really discuss this topic further and analyze the burntax with pre-burntax stats
.
Plus it needs to be considered that a proposal need 7 days to pass, so that’d make it 17 days of collecting data which is imo already way too much, but I guess we can’t have enough data and that should give everyon the time to see the effects of the burntax in full.

4 Likes
55

Please also consider to support new Projects and of course older ones too, tax being not good for them so far!

56

My opinion is that “resetting” the burn tax will not bring the transaction volume to previous levels. A lot of people are still around just because of this tax. If this gets readjusted to a lower rate, most people will leave

3 Likes
57

Very good. But do you know what will happen to your tokens if your proposal is voted against with veto power?

1 Like
59

I believe Mr @Vegas Vega is right and very balanced when it comes to time! There was no time needed! We don’t need just a single month to collect data! We are dealing with something very complex! It’s not just about the exact sciences! We also have the Human component here, which makes the situation even more complex! Soon I come to warn all of you and already in support of @Vegas that, the minimum necessary time, is, that we have a road of at least 3 months of data collection! Not just a single month! Because we still wouldn’t have consistent parameters! Of course, when the time comes for any tax change, if it really proves necessary, we should all listen very carefully…… The CEXs and DEXs…. the dApps…. Anyway, All who make up our Classic Terra Luna ecosystem! 3 Months so that everyone can adapt to the necessary adjustments for the 1.2% rate already in operation on our Blockchain and also so that within that Minimum time we can have much more data needed to implement any new changes in this topic.

2 Likes
60

I was watching since the beginning and i noticed how the volume dropped when binance suspended LUNC during the update and i was expecting it to go back to normal after the update, but unfortunately it didnt.

So the only explanation is that the current tax is high, i guess something arround 0.2% and 0.5% would be great.

1 Like
61

Is it possible to make every time Lunc or Ustc is traded or sold, they burn immediately?

In this way the users would not lose, since they are only exchanging or selling their Lunc or Ustc in exchange for any other currency.

Example:

1000 Lunc To Busd
1000 Lunc x 0.00030$ = 0.3$ Busd
the user receives his 0.03$ Busd, but those 1,000 Lunc are burned.

Is this possible? And what would be its cons?

62

Who is supplying the BUSD for free? This would be the same as someone just buying LUNC with BUSD and then burning it. They would be out everything. Why would anyone provide the free BUSD?

63

I’m a favor and many here too, so it’s not 99% against.

We are still debating which would be the correct one, at the right time, to propose the proposal.

3 Likes
64

This is a very good argument however don’t forget that people don’t like change masses lack intelligence and don’t like change. I believe we must to continue in the same stance for a while see if Coinbase will list Lunc or not.
Will be better to wait until Binance will report how much LUNC will be burnt Monday.
In general I agree that not all exchanges are happy to implement the tax I believe that will be better to let the exchanges decide as their members decide same as CZ proposed.
1.2% I believe is still ok now lowering at 0.2% and bear market wouldn’t do any good.
Let’s leave the things how they’re for a while and see the results.
In general sudden changes are bad people get really confused really quick and panic button kicks in mostly is what fudders and shite YouTubers want

3 Likes
65

I remember someone told, the lcd component was going to have a fix at version 23 and that had to reduce the extra fees others wallets and cexs had to pass to users. When version 23 is going to be released with this fix? In other words the chain is not running full yet and some people is worry about the last 10 days results, are we all for the long run or some market gains?

2 Likes
66

no lower tax, 3$ for 1M Lunc is nothing

3 Likes
67

The proposal to lower the tax is too early. Remember what was the goal when we implement the 1.2% tax burn? Which is to reduce the Lunc circulating supplies to 10 billion! Many people jump into Lunc because of this. Reducing tax will cause the opposite effect. My take is meet the 10 billion first before reducing the tax else all our efforts so far will go to trash !

3 Likes
68

I believe we will burn more lunc with a lower tax than we are now. The burn tax is dependent on volume. There is an inflection point where lower tax and higher volume maximize burn effort. And currently the 1.2 is not maximizing, it is actually hindering the volume, which has many trickle down effects, like less rewards for validators to name one.

3 Likes
69

Want to lower your tax?Create a vote and vote for it with your tokens.Are you afraid to do it? And rightly so.Because 99% of the votes will be against your proposal.

There’s no need to be combative about this. There has been little constructive discussion with respect to the negative effects of the burn tax (which were outlined in the primary implementation proposal). This is not about forcing my proposition through voting, it is about fielding discussion. Posting 345k LUNC to make changes is a drop in the ocean from a community standpoint, but if anything, not doing so should at least give you an idea of where my head is at here (“what are we using the money in LUNC for?”)

Very good. But do you know what will happen to your tokens if your proposal is voted against with veto power?

Rescinding deposits because you disagree with it on a fundamentally emotional basis is an abuse of voting power. If anything, you should be exercising this power on people abusing the voting system to market scams, not as a way to threaten quasi-censorship of valid discussion.

@rahul_kumar

My opinion is that “resetting” the burn tax will not bring the transaction volume to previous levels. A lot of people are still around just because of this tax. If this gets readjusted to a lower rate, most people will leave

Uncertain whether people will leave, but for the most part, most people are correct with two core points:

  1. Coinciding statistic of burn tax + lower volume (remember, a basic regression model does not necessarily factor in all possible dependent variables relative to the independent variables)
  2. Transaction volume does not guarantee higher volume, it is a signal to encourage it. This part of the conclusion was omitted by Akujiro when I sent the copy over to him in the interest of brevity, and I will edit it into my initial post later for others to view.

Tax or no tax, we suffer from incentives to use the chain outside of basic swaps. Prior to tax, this was high-frequency trading, but the tax makes it unnecessarily expensive, so it was moved to CEXs, who control the amount of LUNC burned through tax revenue. Governance is a moot concept if we default to CEXs like Binance, MEXC, and KuCoin to handle our dirty work.

@sean_ninov

My take is meet the 10 billion first before reducing the tax else all our efforts so far will go to trash !

Numerically speaking, we will never hit 10 billion with the amount of LUNC bonded to the network (it is >650b currently). You will have to find a way to convince people to liquidate 640b worth of LUNC down the road. The burn tax alone will not achieve this as most staking and delegating functions are not taxed.

3 Likes
70

I would like your opinion on this discussion!

@wrapped_dday and @Vegas and @ek826 and @413x_45h4w and @Akujiro and @StrathCole think about it?

Could comment!

71

Finally some healthy opinion about tax and volume. I agree that We are killing the chain in long term. We should focus on use-case of the chain, not burning. Let the LUNC price be, but we should work on decentralized nstable coin ustc.

5 Likes