The 1.2% tax burn has been successfully implemented at the block height of 9,475,200 on Sept. 21. Proposals 3568 and 4159, which are expected to impose a 1.2% tax burn for on-chain transactions of LUNC and USTC on the Terra Classic network, were previously passed by the Terra community.
10 hours until the 1.2% burn tax
It’s a great opportunity for CEXs to show they truly care about users over greed
— 🔥🙏 𝕃𝕌ℕℂ 𝔻𝔸𝕆 🙏🔥 (@LUNCDAO) September 20, 2022
These proposals sought to change the tax parameter from its existing value of 0 to 0.012 (1.2%) under Terra governance. All on-chain currency denominations, including LUNC and USTC, will be subject to the tax.
LUNC is implementing a tax of 1.2% for each on-chain transaction that it is asking to be imposed across all exchanges to create a fixed supply of 10 billion LUNC.
The mechanism will be shut off once the supply of LUNC reaches 10 billion. The total supply of LUNC stands at 6.9 trillion LUNC at the moment. The asset supply will need to be cut by 99.82% to meet this objective.
In a recent update, the leading cryptocurrency exchange, Binance, stated that LUNC and USTC transfers from users’ deposit addresses into Binance hot wallets will be combined and subject to the Terra Classic network’s 1.2% tax burn fee once the burn tax is activated.
Additionally, it states that the withdrawal costs for LUNC and USTC will be changed to reflect the 1.2% tax burn fee, as well as the minimum and maximum withdrawal amounts.
LUNC price unimpacted
The recent news of the 1.2% tax burn launch, however, failed to impact the LUNC price as it remains down across all timeframes. At press time, LUNC was trading at $0.00028, 1% lower than in the last 24 hours and down 2.88% in the past week.
After touching highs of $0.0005 on Sept. 7 following a speculative frenzy, LUNC steadily declined to reach lows of $0.00024 on Sept. 16.
Although LUNC is slightly higher than the recently set low, its price action remains lackluster. LUNC, the native token of the old Terra Chain renamed Terra Classic, ranks as the 32nd largest cryptocurrency with a market valuation of $1.7 billion.