This is the continuation from the original thread. [Proposal] BURN and REMEDY fee with each LUNA transaction 💊
“The proposal belongs to everyone here. I just sit down yesterday and decided to think about the idea that could work. Then you everyone made amazing contribution to the proposal I’ve done what I could and never expected such a big reach. Now the rest belongs to the community. I wasn’t prepared for the hates I got from some people, so I will back off a little. I’ve got family, work and life too. I need to make it going somehow. In my personal opinion this suggestion is a good direction. Hopefully do kwon and his @team will figure something out that will work for everyone, especially those who lost a lot of money and their savings. I wish the best for everyone here.”
"What you are going to read here is first part of the proposal. If something new will be added by the community to the proposal you will find the continuation in @bloodcurdle message/thread ([Proposal] BURN and REMEDY fee with each LUNA transaction - #2308 by bloodcurdle): "
Are you part of the community and like the direction of this proposal? Please give it a vote!
[ COMMUNITY PROPOSAL #1273 ]
YES VALIDATORS: 11 and counting ^^
Please don’t vote if you haven’t staked LUNA. People that just bought Luna say their votes are invalid, thus wasted. LINK → [Proposal] BURN and REMEDY fee with each LUNA transaction - #1910 by Joe_Smith
LINK TO GOVERNENCE VOTE: Terra Station
LINK TO PUBLIC OPINION: Revival Plan V2 Preliminary Vote
Based on our volume which is around 3B $ (last 24h) at the moment if we implemented only 3% burn tax on each buy and sell transaction we could burn around 300,000,000,000 LUNA at the time of writing this proposal (I took price of 0.0003). This burn tax could be a measure put in place until the supply is low enough for us.
You could even implement temporary 1% of the volume going to the people that lost money during the crash . Wouldn’t that be wonderful?
We have huge volume that can be taken advantage of. Instead of fighting with each other we should implement some measures that could help the ecosystem.
Please Comment What You Think and Lets Perfect This Solution Together!!!
The final decision will belong of course to the team . Lets gather here ideas that may inspire/help them in making their decision.
- Mathematical formulation of the burning rate for both LUNA and UST towards achieving the targeted circulating supply → LUNA and UST resurrection - Google Sheets INCLUDES:
- LUNA burning Pre-Pegging to achieve a circulating supply of 1 Billion from the current circulating supply of 6.53T tokens. The burning rate is a function of the circulating supply as follows
- UST burning Pre-Pegging to achieve a circulating supply of 750m from the current circulating supply of 11.27b tokens. The target was determined as per the available collateral of 25000 BTC valued at $750m at the current market price. The burning rate is a function of the circulating supply as follows
- UST burning Post-Pegging as a function of the UST price to prevent and punish any future similar attacks. The lower the price gets, the higher the burning rate of the transaction. Such a hefty tax will prevent attackers from making any profits and will prevent panic sales pressure. The burning rate is a function of the UST price as follows:
MORE DETAILED INFORMATION → [Proposal] BURN and REMEDY fee with each LUNA transaction - #335 by 2071
Answers to Questions❓
- Would it be like Safemoon?No I don’t think so, but to make sure I will explain what I mean. Some people compare this tokenomics with Safemoon. It won’t be like Safemoon, because in its case all transaction fee volume is distributed between holders (fat get fatter and only part of it is burned). Here all 3% would be BURNED lowering the supply.
- How would that be implemented on exchange (CEXs) like binance, kucoin,etc?Answer 1 → [Proposal] BURN and REMEDY fee with each LUNA transaction - #89 by dfunkAnswer 2 → [Proposal] BURN and REMEDY fee with each LUNA transaction - #93 by David_WedlockAnswer 3 → [Proposal] BURN and REMEDY fee with each LUNA transaction - #94 by Jishnu_saini
Additions from Comments
Limit UST to LUNA conversion to certain circumstances (only possible when market cap of LUNA > number of UST, limited amount of LUNA minting per time to small percentage of market cap)
link: [Proposal] BURN and REMEDY fee with each LUNA transaction - #23 by rescue
20% temporary fee for sale transaction and 1-2% for buyingAll in order to:
- there was no desire to sell on a short run
- if they are sold, then this is only a plus for burning, since you cannot miss the trading volume that is going on now. The volume will play on us.
link: [Proposal] BURN and REMEDY fee with each LUNA transaction - #180 by anti-crisis-manager
- “Rolling taxes” Suggestion comes from @Jishnu_saini who send me a private messageEx:
Start at 10%. Every 1.5 T burnt 1% drop in fee.5 T supply → 9% fee
3.5T supply → 8% fee
2T supply → 7% fee
500B supply → 6%Now drop 1% every 100bn burnt400B supply → 5% fee
300B supply → 4% fee
200B supply ->3% fee
100B supply → 2% fee
2% fee till we hit 50B supply. Then 1% till we hit 1B. Then the fee stopslink: [Proposal] BURN and REMEDY fee with each LUNA transaction - #429 by HelloThere
- Small vs Higher Fee (Opinion in contrary to 3rd point here)“ultimately the goal is to encourage folks to keep using Luna instead of higher taxes, just keep building more products and services to encourage it. Investors will return.”link: [Proposal] BURN and REMEDY fee with each LUNA transaction - #440 by yapdakilla
- Gas is a small computational fee that covers the cost of processing a transaction. Gas is estimated and added to every transaction in Terra Station. Any transaction that does not contain enough gas will not process. Gas on Terra works differently than it works on other blockchains:
- Validators can set their own minimum gas fees.Every block, gas fees are sent to the reward pool and dispersed to validators who distribute them to delegators in the form of staking rewards. Similar to EIP-1559 on ethereum network, we can simply change gas fee to,
Gas Fees = Units of Gas Used + (BaseFee) Where BaseFee is the tax that is directly burned. Thus all validators add a BaseFee to their gas that they burn. This would require no change in code. Validators simply agree to add a BaseFee to the gas that they agree to burn. This could be implemented immediately.link: [Proposal] BURN and REMEDY fee with each LUNA transaction - #1997 by ek826
- The tax proposed could include some sort of % fee that would go to validators . This way they could be more likely to support your approach. Let me know if I can be of any help. Similar bribe systems exist for example in Curve finance.link: [Proposal] BURN and REMEDY fee with each LUNA transaction - #2266 by Mpowski
- “Agree. Keep the existing structure in place, fix the problems to avoid a repeat, and add a transaction fee to help build reserves, burn, and for general maintenance of the ecosystem. Anything else smells like financial fraud. People using terms like “Equity” and “Debt” need to be mindful of SEC’s reach. Stick to what is in place and improve.”
link: [Proposal] BURN and REMEDY fee with each LUNA transaction - #43 by Joe_Smith
- “Well UST seems to be benefiting from the huge transaction activities of Luna. Luna rose by 1000 percent in the last 24 hours, while UST rose by a hundred percent from about 0.09 to 0.2. I want to believe Terra Team are seeing the positive side of the whole thing and probably taking advantage of the increase in activity to come up with a more better and substantive plan. From the look of it, it is now obvious that the system can be rescued without creating a new one.”
link: [Proposal] BURN and REMEDY fee with each LUNA transaction - #21 by Equalizer
- “I 10000% agree. This is by far the best idea I’ve come across […] there is absolutely no point in having an ecosystem where you k ill your hero product. This simple solution can avoid the mess (current and future) altogether.When market cap of LUNA becomes less than UST, UST will depeg. Some will argue what is the point of UST when it can’t be stable […] The solution to this downside is to position UST as a junk bond equivalent - in other words a riskier debt product. The risk can easily be offset by offering a higher APY compared to other stablecoins to compete in the market. It will become the choice of users if they are ok taking a higher risk for the higher return. Further mechanics could be put in place to reduce the risk such as reserves, burns, amount of luna that can be minted per x time, etc but under no circumstance should Luna be minted when market cap of luna goes below the market cap of UST. This seems like the simplest way out of this.”"
Link to full comment: [Proposal] BURN and REMEDY fee with each LUNA transaction - #58 by dfunk
- " The burn needs to happen on-chain (EDIT: Safemoon somehow can). Infact based on the comments here as well as other threads, the following needs to happen:
- Burn LUNA at a steady rate to reduce excess supply
- Open up staking at a steady pace to increase LUNA token demand
- Burn community UST ($1B) to reduce UST supply
- Use BTC reserves ($1B) to reduce UST debtA combination of above should help increase LUNA price and market cap, while reducing UST market cap at the same time.Additional steps:
- Once market cap of LUNA > market cap of UST, resume on-chain swaps and the system as usual.
- Change the algorithm to ensure UST → LUNA minting does not happen when market cap of LUNA
is less than marketcap of UST
- Deploy additional security measures such as rate limiting LUNA minting, additional reserves, etc"Link: [Proposal] BURN and REMEDY fee with each LUNA transaction - #89 by dfunk
“I think recovery is going to be a mid term to longer road, than a shorter one, and in some ways the longer road will allow for a healthier return. I believe that just the fact of not giving up the ship will actually work to instill some confidence in the project by others, and that confidence will regain for each inch of ground that is retaken in terms of bringing value back to the LUNA and UST, and having a more healthy reserve that can handle catastrophic events much better. I believe this is the only way that people will truly see a recovery of LUNA and UST. […] I did like that you thought through the market pressure angle for controlling high volume transactions. I think having a algorithm in the protocol for mint / burn (for exchanging), as well as selling that responds dynamically to volume (rather than a hard coded value) for the Terra blockchain would help slow down to a reasonable pace those transactions that could create a run and quick loss of confidence, but allow quicker transactions in accordance with the speed the blockchain would allow for for tiny transactions. Temporarily I believe they need either proposal 1164 or 1169 until something like that is done however.”
Link: [Proposal] BURN and REMEDY fee with each LUNA transaction - #569 by HelloThere