Binance recently announced that it would temporarily suspend support for the incineration of its transaction tax until 1st March 2023.
And they warned that if LUNC community won’t comply with their demands, they could permanently stop supporting burn.
Their demands are drawing a coercive backlash from some community members, while they seem to be doing pet training against LUNC.
But we need to rule out the emotional element. Binance is a profit-seeking company. We need to approach their presentation from a business perspective.
Let’s analyze what they want and how they benefit the community through their presentation.
1. To whitelist Binance’s wallets
They demanded that 43 Binance wallets be added to the tax-unaffected whitelist.
And what you have to pay attention to here is 43 Wallet addresses.
Most community users believe that 99% of Binance’s LUNC assets are in one hot wallet.
Why does Binance need 43 wallets?
That’s because of the bridge wallet used for the transaction of the Binance Exchange.
They partition the huge volume generated by Binance into multiple wallets, distributing the business, and increasing security.
They had adopted this practice before the 1.2% tax of the LUNC was applied.
However, after applying the LUNC 1.2% tax, they needed to improve all of these systems to prevent duplicate taxation. You may remember last September when Binance was pending deposi and withdraw LUNC for about 5 days.
As a result, all on-chain volumes that occurred in the bridge wallet of Binance have been deleted, resulting in a diagram-like result.
I checked the 43 wallet addresses announced by Binance. Most of those wallets are Bridge Wallets which Binance and transactions have been suspended since September.
And what we can deduce from this is that if Binance’s wallets are added to the whitelist, they might go back their transaction system to the pre-1.2% Tax.
This means that the on-chain volume of the LUNC is more than five times larger than it is now.
Of course, most of the volumes come from whitelist wallets, so the amount of tax burn does not increase by fivefold.
But for outside of community investors who don’t look at the detailed development stage of the chain, the on-chain volume of the exploding LUNC will make the investment attractive.
We will only have to be wary of concerns about the removal of the Binance Wallet whitelist of greedy community members who will surely emerge in this situation.
They repeat suffer a big loss in going after a small gain.
And the addition of the whitelist in Binance wallet can be used as a deal card with other CEXs that have not yet listed LUNC.
Instead of being exempt from Hot Wallet’s tax, CEX collaborates with the LUNC community on the condition that it burn 50% of trade fee like Binance.
They can get a good image of the exchange that helps them burn the LUNC coins without loss asset.
The LUNC community will also get a deal card to take an equal position in the deal with CEX.
Community benefits for add whitelists
The volume of the on-chain will increase by more than 5 times
Rising On-Chain Volume Raises Investors’ Interest
50% CEX trade fees are burn to make up for losses Instead of onchain tax burn
Gain a reasonable deal card with other CEXs that are reluctant to be listed with Volatility tax rate
2. To create a new burn wallet for Binance
This demand can be assumed to be consideration for the LUNC L1 development team.
If the current Segniorage Reward Policy is not improved by until March 2023, it can meet Binance’s needs by providing a new burn wallet address as an alternative.
And Binance can secure an independent structure regardless of the direction of community development. the protection of Binance exchange users.
3. Apply IRI fund for new project
Binance raised $2 billion in blockchain industry recovery funds. They review development projects in a sustainable and sound direction and support the development costs.
This means that anonymous development teams do not need to withdraw funds from the community pool of LUNC for development.
99% of community members have no knowledge of blockchain development.
hey are not capable of auditing the integrity of the project themselves, and should vote only on the development team’s white paper, which is described in difficult terms, and abstract development directions.
Scammers often try to form a narrative through SNS, or unite with some verifiers to pass unfair proposals.
Binance would have watched all of these communities’ past 6 months. Fraudsters and thieves are hanging around to rob an ownerless community.
In order not to repeat the wrong fund, such as the Terra rebels crisis, someone must take on the role of the project’s auditor.
Binance is a leader in the blockchain industry, and their project audits will be more reliable than any other institution.
And they even said they’d pay for the development.
Do we need to give money in community funds to unverified anonymous developers?
If they have really good and sustainable project ideas, contact Binance, not the community pool. They will evaluate the value of your idea properly.