[Proposal] BURN and REMEDY fee with each LUNA transaction [PART II]

1 day left to vote for this proposal, still a long way to go to reach quorum. At this rate, it won’t reach it unless the top validators vote. I feel like the fork is inevitable at this rate :confused:

4 Likes

The vote is not so important, you can repeat the vote on the classic Terra after the fork Terra classic will be the revolution of the crypto world

1 Like

Is there actually going to still be any support for “Terra Classic” (hate this name) after the fork? Who is going to implement any changes? Even if development continues, what’s to stop the current insiders from just blocking everything with their massive voting power?

2 Likes

After the staking is live again, their voting power won’t be big anymore, there will be new validators. This proposal must be suggested for the Luna Classic again.

2 Likes

all the respect to them for trying to be fair even though there are rumors they were being forced to Vote YES to Do kwons proposal. Support their tweet https://twitter.com/Figment_io/status/1527698724490579969.

If this proposal goes up again after ending. We have a VERY GOOD chance of making it happen @HelloThere

1 Like

I have thus far avoided opining on this, for the following reasons:

  1. Many of the people promoting this proposal are beleaguered underdogs in the fight against the rugfork. And I respect many of them. I don’t want to demoralize them, or fracture opposition to the rugfork. Defeating the rugfork is the top priority here, and we must stand united on that.

(Rugfork. I coined the term a few days ago. It is the honest term. Feel free to use it.)

  1. You people are acting fast. Thus far, I have ideas and early prototypes. Unless or until I deliver something solid… Well, we’ll see then.

  2. If implemented, this proposal doesn’t directly affect me. I won’t be paying any transaction taxes—nor will any users of anything that I build. And who knows? I’m not entirely sure about the economic effects of this. You may succeed in boosting the value of my LUNA. I want to see that!

At this point, however, I think that I do need briefly to set on record why I am, at best, lukewarm about this proposal. I also must raise one strong objection to something that I just noticed in the fine print.


Understandably, everyone is just a little bit panicked about the LUNA supply. Trillions of LUNAs! Silvery moonlit oceans of LUNA! I myself made an early thread about LUNA burns. We all want to reduce the supply.

However, supply is only one side of supply-and-demand. My own thinking has consistently been both supply-side, and demand-side.

All other things being equal, I would prefer to have a tiny piece of a pie that grows, than to have a larger piece of a pie that shrinks. Actions can and should be done on both fronts, so that LUNA holders have bigger pieces of a pie that grows. However, this must be done with care: Supply reduction must not be done at the cost of undermining demand. That is economically shooting oneself in the foot.

Blockchain fees reduce demand. It is an unavoidable fact. Even the biggest, strongest coins cannot get away with imposing high fees on all transactions. That is why both Bitcoin and Ethereum have L2s—and why Ethereum is hemorrhaging market share to upstart smart-contract chains with lower fees. Bitcoin is still doing well, because on-chain fees are still reasonable—and the whole situation is anyway different, because the use case is different. It’s not a smart-contract chain requiring a series of high-gas transactions to get anything done. Nonetheless, the mass-adoption push in the Bitcoin community is largely focused on Lightning, where fees are negligible. It’s not reasonable to buy a cup of coffee with on-chain BTC, but you can make micropayments on Lightning without even noticing the fees.

Um, no, it doesn’t work that way. All of your equations and number-crunching are predicated on current volume. They do not account for the predictable effect of raising transaction costs: Transaction volume will fall. Raise transaction costs more to compensate, and volume will nosedive.

But for my part, I haven’t much cared about LUNA fees either way: I am effectually an L2 LUNA user.

Terra is bridged to numerous other ecosystems. I am a bridge user. In the past, I have held bridged UST (and no, I was not receiving the Anchor 20%!). Now, I hold bridged LUNA. I have never paid any LUNA in fees—zero. Now, I am currently working on some projects to boost LUNA demand, and/or to offer incentives for burning LUNA.

I don’t want to talk prematurely about what is, thus far, only vaporware—the relevant point here is this: If I succeed, then I will generate a fantastically high volume of Terra-tax-free LUNA transactions, paying 0 LUNA in fees. Nobody should complain about that: I will be boosting demand for LUNA, and (with one active idea) giving people something valuable in exchange for them choosing to burn their LUNA.

I want to make LUNA awesome again. The amount of untaxed LUNA volume I generate will be roughly proportional to how much I succeed in making people fall in love with having wallets full of LUNA. If I fail to make LUNA awesome, then I won’t be generating any volume. Really, don’t complain.

On my native chain, I have read the source code of the token implementation. All wrapper tokens are standardized (and, by the way, totally fungible!). The Wormhole people don’t even have the the technical ability to impose arbitrary restrictions, fees, or taxes on transfers of wrapper tokens; please don’t bother them about this, as they could destroy all trust in their bridge if they tried to do what they can’t do by design.

(It is a significant issue. There are hundreds of billions of tiny little LUNAs sitting in Wormhole right now, wrapped on about a half-dozen chains.)

That’s why my private response to this was, “Eh, maybe I’m wrong. Maybe this will increase the value of my LUNA; I’d like to be wrong about this! I wish these people well. I’ll just keep quiet about this, and focus on fighting the rugfork.”

However:

This is a hard “no”, absolute no, to the extent that it would get my “no with veto” if I could vote.

Trapping people’s money is wrong in principle. If people want to sell their own coins, they have an absolute right to do that without having an extra 20% loss artificially imposed on them. In the economics of this market, a 20% tax on sales is an almost confiscatory tax—almost tantamount here to retroactively locking coins to stop people from selling.

And a tax on buys? Nothing could be better calculated to trash the price of the coin. At market, indeed, a 1% tax on buys can be expected to depress bids by at least 1.010101…%. (That’s 1/0.99 - 1, which is slightly >1%.) In practice, it would probably reduce the price more: It adds friction to the market, a negative that’s difficult to quantify but probably much more than 1%.

Similarly to a general tax on transactions, neither of these can be enforced outside the Terra chain. I’m a DEX user. I bought all of my wrapped LUNA on DEXes. I have no intention of selling—to the contrary, I recently held even when I could have taken as much as 50x profit! (My DCA from bottom-buys is extremely low. I’m still much in profit right now, but it’s been sliding pretty badly.) I hold! Each and every little LUNA is dear to me. In principle, however, I reserve the right to do whatever I want with my own coins.

Some DEXes may or may not have the ability to impose special buy/sell taxes (though the responsible parties would probably say no). Some DEXes, the really decentralized ones, lack this ability altogether—again, I have read the source code.

3 Likes

We should add a kick back for the validators. I don’t love how this system works but I think we need to grease their palms to get their support. 0.5% of tax goes to them. Believe me it will pass fast.

4 Likes

Rotflmao

1 Like

Im fine with this. but more like 0.1%

1 Like

Instead of text proposal, do kwon suggested to create a parameter change one

"If u set the tax cap to 0.1 it limits the total tax paid in any txn to 0.1 sdr (14 cents)

Also you need to formulate a paramchangeproposal not a textproposal"

1 Like

Great work. Check my proposal

1 Like

GO to MEXC Global and vote for buy back and burn

3 Likes

Why do validators not participate in voting?

Wouldn’t it be better to give some benefit to validators so that they guarantee approval?

Call it a bribe, that’s what DK did. DK launched the proposal already knowing the result. We are in a centralized system.

4 Likes

whithouth the validotors and validators we can’t reach quorum… but yes we need need a burn mecanism.

3 Likes

This is exactly right. The voting process is so jacked. If validators don’t vote, nothing passes because they hold so much power. It appears they are only voting on Kwon’s because they’ve been bugged so much or bribed by Kwon. Most of the abstain votes are just to try and get people off their backs but it doesn’t actually help our cause much at all.

5 Likes

Agreed. That’s why we need to play the game as they have rigged it. We need to tie a 0.5% kickback to the validators to this proposal. Let’s say the tax is 3.5% of the transaction. 3% will be burned and 0.5% will go to the validators. With this amendment it will pass. If anyone has direct contact with @HelloThere, please urge him to include this language in the proposal. This is the way.

2 Likes

Authorities are combing through these posts. I personally wouldn’t be advocating for any type of lottery or kick-back scheme.

IMO, get the journalists to write about how the vote has been taken away from the investors.

4 Likes

Slightly long post that was, but makes perfect sense regarding why so little people have voted on this.

When thinking about the increased taxes quickly, it does indeed sound good. But so many valid points were raised solely by this one post that I also no longer desire any sort of transaction tax burning system either.

Can also definitely agree on the fact that each luna I have is also dear to me, no matter how much money I lost with the price crash or how much more luna I can now get much cheaper. Nobody knows that future brings so it’s also impossible to say whether luna now is indeed only around $3 of the old price back in the day or not.

As long as the current supply is not increased by multiple fold I see no reason why the demand could not go up again in a near future. Especially after the current bear market ends only insane things will end up happening to the price of luna.

2 Likes

I sent you a message, please feel free to reach out to me anytime. I think we can possibly work together to tackle a number of fronts.

2 Likes

for vote to burn, check this link:
LINK TO GOVERNENCE VOTE: :point_right: Terra Station :point_left:

1 Like