Revisiting the 1.2% off-chain burn tax by statistically accessing its' viability

Statistically testing different off-chain burn taxes (percentages) with the help of exchanges/Binance to determine the off-chain burn taxe’s applicability or lack thereof and which burn percentage is the most reliable/stable.

Without burning significant chunks of the available supply, the chain will not improve and won’t attract new investors/money inflow which will cause development funds to be lower. Expecting Binance to pay for the burns for years to come and funding the development has been shown not to work.

Following Binance’s announcement regarding their reduction of burn contributions and taking the discussion about the different burn tax percentages as well as funding concerns into consideration I would like to propose the following idea:

The 1.2% tax that was originally expected to be applied from the side of Binance and other exchanges towards off-chain burns was dismissed by CZ mainly because other exchanges were not ready to apply the tax and it was expected it would drop the trading volume significantly (without any evidence for this being the case).

I don’t doubt that the 1.2% burn tax might be too much but let’s be real: The 0.2% that was donated by Binance towards the burn doesn’t do that much either. Now with the reduction towards a 0.1% tax it is even less likely to burn significant amounts of LUNC and we are essentially dependant on Binance cooperating over years if not decades of time for this to burn significant amounts of LUNC. I do not believe that it is Binance’s job to do this and I think we also shouldn’t take these contributions for granted. There are enough members that took these contributions for granted and expect Binance to pay for the development/programming expenses, which myself just like others have been criticising weeks ago.

This is why I suggest that the community members that have been in contact with Binance ask Binance for the following: Could it be possible for Binance to implement off-chain burns that are charged additionally to their trading fee (that they may or may not be contributing voluntarily in the future) and test how different taxes actually effect trading volume in real life. I doubt that the effect is really as negative as expected. The main reason for expecting this is especially as a lot of people that buy LUNC on spot pairs are likely to hold their LUNC for a while if not even years to come (I know I do) and therefore don’t care about the tax as they expect significantly higher returns don the line and are willing to pay the additional tax just for the “opportunity” to be investing in LUNC. The burn tax may be reduced on margin trades if needed but it first needs to analysed and tested whether this actually effects the trading volume and not just “assumed”, as this seems like a simple excuse and the community accepted it!

The reality is that yes, a 1.2% burn tax might be too much but it might be possible to charge an additional 0.2%-0.5% without Binance running the risk of losing customers. This needs to be tested! You might say: “Why would Binance want to do this?” => They hold LUNC themselves, could buy additional LUNC as an investment that will appreciate in value and gain marketing exposure as the exchange that “saved” LUNC. As much as I agree with continually developing the chain it needs to be remembered that this chain was fully functional until a couple of months ago! Yes certain improvements need to be made but without new money inflow and massive burns nothing will improve and we can’t expect Binance to be funding the development of the chain.