This proposal is meant to gauge overall community interest in Osmosis implementing support for off-chain tax collection and remittance following the upcoming reconnection of the Osmosis/LUNC IBC channel. That is to say, do we collectively wish for Osmosis to support the burn off-chain?
What we are asking for from Osmosis:
We are signaling to Osmosis that the LUNC community wishes for the burn to implemented on the Osmosis DEX to both LUNC & USTC related. To incentivize Osmosis to support the tax off-chain, we propose that the following burn-revenue share structure: 90% of the collected tax is to be sent back to Terra and into the burn wallet (terra1sk06e3dyexuq4shw77y3dsv480xv42mq73anxu), the remaining 10% shall be sent to the Osmosis Community Pool or a smart contract solely controlled by their governance mechanism. The 10% allocated to the Osmosis Community Pool shall be both the payment for ensuring that the tax is faithfully collected on an ongoing on Osmosis.
How this can be accomplished:
The creation of a coin/token agnostic & governance controlled burn module that allows for Osmosis DEX to place a % base premium on any coin/token on their DEX, via governance vote. The premium can be placed to the front and back end of swaps on their DEX in order to avoid de-stabilizing their uniquely hard coded liquidity pool structures. The coins collected would then be sent to an Osmosis smart contract that will then send the coins to back to Terra and into the burn wallet and also into the Osmosis Community Pool at 90% to 10% basis as discussed above.
Prior to the crash, Terra and Osmosis enjoyed a deep relationship, with Osmosis being Terra’s primary non-CEX, off-chain source of liquidity, which allowed LUNA holders to access deep liquidity pools and sophisticated yield farming strategies. In turn, LUNA provided provided Osmosis liquidity providers with a rich stream of swap fees. Our devs were friends and co-mingled. Now that LUNC is emerging from the shadows of the crash, we are once again on the cusp of reigniting our relationship with Osmosis and our devs are now once again forging friendships with one another, coming together as part of a greater collective ecosystem.
LUNC Community, we must be willing to work with our counterparts within the greater Cosmos ecosystem to ensure that the tax is supported on as many off-chain platforms as can be reasonably accomplished. Join me in signaling to Osmosis that we wish for them to implement our tax on their own native DEX.
Please leave any feed back here or feel free to message me on twitter (@CosmosCapybara)
If it increases burns, I’m all for it. Let’s not fool ourselves, burns are necessary, we can’t function with the supply we have right now. And if we don’t take action right now that the price is low, we will never reduce the supply
Thank you. I believe Duncan is working with Kuji for similar & @lunaticlunclover69 may be able to get Kava Labs and Crescent Hub onboard as well. That would only leave Junoswap & Chihuahua DEX unaccounted for but if we can do Osmosis Kujin Kava the last two will be easy. Someone else other than me will need to get Chihuahua onboard though I had a big fight with their core dev & am not welcome…
Just for people to be aware: if Prop 10983 passes (RewardPolicyrate_min to 0.5) then this would change the numbers to 50% tax collected to Osmosis Community Pool, 50% to burn.
The idea of a base premium is like this: right now, Osmosis has a standard fee charge on all assets in their DEX, and each liquidity pool has its own fees (normally 0.2%, but it used to be 0.535% on the big Terra pools). Instead of charging Base OSMO fee + pool fee, we ask that ALL Terra Classic assets (including, but not limited to, LUNC, USTC, KRTC, GBTC, et al) add an additional fee premium on those trades, so it would look like: Base OSMO fee + Tax premium + pool fee.
Low-priority fees on Osmosis run at 0 OSMO per-trade. The tax premium would be an extra charge of OSMO. Then, after a pre-agreed upon epochal basis (daily, for example), they swap the fees taken to LUNC, then send it to the burn address, then keep the rest of the OSMO.
The reason why it’s beneficial to negotiate this post-#5234 (0.2% + 10% revenue) is because they have no incentives to integrate off-chain burns except for charity. It takes extra development work and time, and they got blown out by Terra (-67%+ drop in OSMO plus half of their TVL). This would be a good gesture that is in mutual benefit. Raising RewardPolicy allows them to recuperate more of the money they lost in Terra in May '22.
Unfortunately only LUNC & USTC are available on Osmosis.
Since the module will be uploaded to Osmosis, we do not know the exact specifics regarding the mechanics of it. So best to just provide a general framework in this signaling proposal & if it passes we can device a more detailed scope of work, pay back period/time & projected burn volume because by then the IBC channel will have been patched & we can get an accurate representation of IBC swap volume to use in projections.
Burning off-chain will deter Manipulators and speculators. but everything needs to be transparent. Also, creating a donation wallet for burning here and transferring 5% of the collected donations to the Terra work team will also accelerate the burns.
@Gurkan_Okay we do not need to transfer LUNC to the TR dev team this way as the upcoming RewardPolicy rate_min will ensure the community pool gets a greater portion of tax revenue than it currently does.