The purpose of this proposal is to outline the possibility of securitizing a portion of the community’s taxes through the distribution of a new token, called LuncTax. This report will explore the benefits and challenges of this proposal, discussing issues related to the percentage to be securitized and the tokenomics of LuncTax.
It is proposed to securitize 90% of the 0.2% tax (or a percentage of it) through the distribution of LuncTax. The token will confer on holders the right to receive the community’s taxes, and the proceeds from the sale of the token, priced in UST or LUNC, will be instantly burned. The community will have to decide on the precise percentage of tax to be securitized.
Securitizing taxes offers the advantage of instantly burning the revenue from the sale of the token, contributing to increasing its scarcity and reducing the amount of LUNC or UST in circulation. Additionally, trading of this new token could encourage the entry of new capital into the chain and increase the volume transacted on it.
However, there are some challenges to address. Firstly, the decision on the precise percentage of tax to be securitized must be carefully made to ensure a fair balance between the taxes that will go to LuncTax holders and those that will continue to be sent to the d3ad wallet. Secondly, the tokenomics of LuncTax must be appropriately designed to ensure maximum return for LUNC holders while keeping the offering attractive to new investors. Additionally, a time frame for the tax to remain in effect must be established for the sake of fairness to the LuncTax token, as once the tax is removed, it will no longer have any value.
Regarding the tokenomics of LuncTax, the community will need to establish the token’s price and distribution conditions. Additionally, transparency in the distribution of the token will need to be ensured, and mechanisms such as auctions should be considered to guarantee fair access. It is suggested to opt for a small trading tax for this cryptocurrency, so that part of the securitized tax returns to the protocol’s ownership, which can then decide whether to use the revenue to fund CP, burn it, or resell LuncTax and burn the proceeds.
Now I will run some simulations.
According to data taken from : LUNC Burner | TerRarity
In the last 30 days 919,069,620 luncs were burned through the fiscal burn, therefore 30,635,654.00 luncs per day. At this rate per year, that would be 11,182,013,710.
Assuming you want to derive the equivalent of 3,5,7,10,15,20,25,30 years of current tax revenue.
The bet of the holder ones is that tax revenues will increase. And LuncTax trading will already help with this. Providing a real incentive to be able to burn their lunch.
Also having burned a fair amount of the total supply, now the taxes they collect, in dollars, will be worth more than they would otherwise be worth without the securitization.
If the community approves this, the relevant team will implement the necessary.
The proposal to securitize the community’s taxes through the distribution of LuncTax represents a potential solution to excess supply that can be implemented in a short period of time. The implementation of this project requires careful planning and active cooperation from the community. The final decision rests with the community, but it is hoped that this proposal can be a useful contribution to the discussion on the future of the Lunc ecosystem.