New Economic Policy for Terra Classic: Set of 4 Proposals to Align Incentives

I agree, the issue is not the staking rewards, the issue is how those staking rewards are accrued - the staking rewards mostly accrue from the oracle pool which is depleting so from a long term perspective the rewards will go down, which isn’t great for a long term staker. We need a more sustainable solution to get staking rewards which I believe can come from gas fees + a part being apportioned from burn tax as per Proposal No.1.

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Well, swollen volume won’t go away on its own. This still needs to be dealt with. Too much money supply carries a danger in the future. The thing is obvious

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No one is watching these lunc micro-burns anymore. Go work. Repeg and dapp back. Enough.

Best example: this month 8b Binance burn + btc rise = lunc fall.

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How many times idea of increasing tax has to be rejected by community?
We need utility and higher trading volume especially on-chain and we dont need any tax increase and our goal has to be to remove tax.
It is already ridiculous to see every week new proposal about increasing tax…

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As I recall correctly, the following was a proposal was put up last october to promote chain utility:

Promote Chain Utility via Establishment of the Terra Classic Grants Program

This is the current status of the proposal:

https://terragrantsfoundation.org/founding-and-grants

It reads:

No grants recommended yet

It has been 5 months.

Any specific utility that is being built currently? @Jetam mentioned Terraport. Anything else?

Besides, staking is the biggest utility on chain which is already tax-free.

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Apologies for the shill’ing, this will go on vote in the next 7 days. The liquidity modules will also be fixed. It’s in the proposal.

I would recommend holding off any tax changes currently. Cause changing the calculations continuously is an issue for any dApp developer. I dunno whether others have come up with an AMM yet, but in my application at least, changing tax from 0.2% to 1.2%, or 1.2% to 1.5% will affect the profits the user is making.

You could just take the profits and burn it if you wish. Why do you wanna force every user, Including whales, to pay a burn tax? I get the fact that you will exclude the dApps from the tax but this cannot be a permanent solution for anything.

Also, are you absolutely sure that changing the tax will work? I mean, there is no evidence to show that any tax change has ever worked. So, why are we doing it again and again?

I see your proposal aims to secure funding from the community pool - but the community pool is funded by burns - so if we increase the burns, we’ll have more funds in the community pool and chances of your dapp being funded would also increase.

Basis the data I’ve seen, I believe this to be the best option. Dapp usage is currently less than 3% so the argument for dapps is very low. I’m willing to wait for another couple of weeks to see if this changes but too much wait isn’t good.

Besides, I’ve already proposed a tax exemption for high volume dapps so the tax won’t hurt them.

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Whitelist dapp contracts. It should include CEXs aa well

Maybe we should start a discussion how to lure some existing dapps on luna to lunc chain after the parity happens in next 2 weeks?

Some grants for migration can be given?

If that is achieved and there is a pick up in transactions (and burning) 0.2% tax and split can stay as they are.

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As far as I understand, LUNC isn’t a meme coin. It’s a DeFi coin and its primary purpose is to be used for DeFi applications. Instead of checking out the props that could make that happen, we are actually bickering and fighting over taxes.

That is because both of the investments before this were for everything else apart from dApps. We haven’t exactly invested in any dapp yet from the community pool. The last investment was the L1 team and the investment before that was a wallet. These are not applications. Fund applications and you will get to know what happens on a normal DeFi chain.

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The issue is that there aren’t enough funds in the CP to fund anything. We need to increase burns to increase funds in the CP.

So to answer your question, LUNC needs to be a meme coin for the short term to become DeFi coin for the long term.

Meme coin → short term goal
DeFi coin → long term goal

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First tax increase proposal in a while accompanied with a reasoned justification for picking a particular tax rate.
This is a tax increase proposal I think I could vote yes for.

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Someone gets it :slight_smile:

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As far as I understand, delegator rewards are distributed from OP. Nodes execute transactions based on gas. If the AnteHandler did a 50-50 between the CP and the OP, then there is no need to burn anything and still the CP and OP will be funded. This is as far as I understand the network. I could be wrong.

Delegator rewards are distributed from OP + gas fees.

Transaction fees are a combination of gas fees + burn tax

If AnteHandler did 50-50 and burn was 0 then 0 would go to CP (since 50% of 0 is 0).

We need more burns to increase funds in CP.

Therefore to reiterate:
Meme coin → short term goal
DeFi coin → long term goal

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Doesn’t seem like there are too many options apart from this as far as I see.

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If we do not start working with repeg and dapps:

Meme coin → short term goal
D3ad coin → long (1.5 years) term goal

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Interesting.
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Regardless of any merit to the suggestions the community overwhelmingly chose not to vote for tax increases just days ago.
With Terraport about to launch this needs to be given an opportunity. A marketing point of Terraport is that combined with the 0.2% burn tax it could (if the community gets behind it) provide a competitive application built on TerraClassic that using the burn initiative could not only burn LUNC but demonstrate to other builders that LUNC can be viable.
It is true that if Terraport was whitelisted that it would be more competitive (against other Dex) with a lower fee percentage however this would benefit TERRA but not LUNC so much. Although this could be positive for Terraport investors, Terraport was primarily built to benefit LUNC.
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I agree that staking needs to be sustainable, and give this another 2 months and maybe it is worth revisiting. However, currently stability is needed. Also tobin tax, burn tax, dfunk / vegas tax, whatever it is called will not be compatible with applications on LUNA2 wishing to build on LUNC as i understand.
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Thank you for your thoughts however.

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We already have dapps - please see them here: Terra Classic TVL - DefiLlama

We have a few DEXes already like Terraswap, Astroport, Loop, etc. We have liquid staking like Eris Protocol.

The issue is nobody uses them. Contract executions are ~3% of the transactions.

The biggest utility of Terra Classic is staking. Our staking ratio is only ~14%. We need to focus on increasing staking rewards so that more people stake LUNC.

I agree. I believe Terraport is launching on 31st March. This proposal shall be revisited after that.

It will have no impact on dapps since it will be removed so dapps can be easily ported not just from Luna 2 but also any cosmos dapps building on cosmwasm will have full compatibility since tax won’t apply to them.

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:man_facepalming: :man_facepalming: :man_facepalming:

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