Recently, the Terra classic community proposed that the Terra classic tax burn rate for its native tokens (LUNC and USTC tokens) should be reduced from 1.2% to 0.2%. It didn’t take much effort from the Terra classic community to get Binance to agree to the tax burn reduction proposal.
This move from Binance was enough conviction for three other top exchanges to declare their acceptance of the proposal.
Immediately after Binance’s acceptance, Crypto.com was the next exchange to declare public support for the proposal. However, it mentioned that the tax burn reduction has nothing to do with regular transaction fees. This proposal will become on the Crypto.com platform beginning on the 19th of October, 2022.
Similarly, OKX also followed the steps of Binance and crypto.com in adopting the tax burn proposal. OKX will implement this new tax burn immediately after the burn mechanism is live. Hence, the exchange announced that it would halt all deposits and withdrawals for the Terra classic tokens to implement the changes.
Also read:KuCoin is the third exchange after Binance to publicly declare its support for the new burn mechanism in the same way as the other two exchanges mentioned above. In addition, the exchange also said that the tax burn would become effective at the Terra classic block height of 9,878,400.
Why The Tax Burn Reduction Proposal
The previous tax burn rate for the transactions involving Classic and Terra classic tokens was 1.2%. This rate came to effect last month. But it caused a massive drop in trade volumes for the Terra classic.
Hence, the Terra classic community decided to review this rate and bring it to 0.2%. The Terra classic community hopes this tax burn reduction rate can boost transaction volumes for the Terra classic tokens.
The community also proposed that 10% of the tax burn fee should be channeled to other community projects.
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