After collecting the required votes, an important proposal has just been passed in the KuCoin network. The proposal aimed to increase the fire load of Terra Classic LUNC to 0.5%.
Following the positive results, KuCoin stated that the burn rate of the LUNC network was increased from 0.2% to the proposed 0.5%.
LUNC Network burns tax spikes on KuCoin
KuCoin increased Twitter to announce the increase in the combustion tax. In its announcement, KuCoin stated that it would facilitate the raising of Terra Classic LUNC and TerraClassicUSD (USTC) on its platform after the activation of the burn tax.
Specifically, the activation will occur at the designated Terra Classic block height of 12,902,399 and take effect on May 23.
Once activated, KuCoin will pay users more for transactions with the two crypto assets, LUNC and USTC. Aside from the increased payments, the combustion tax will reduce LUNC’s supply.
But there is still a downside to the increased tax on consumption, as it will reduce trading volume. This is why many exchanges have rejected such proposals in the past.
Notably, KuCoin has always supported such increases even when other exchanges slow down. For example, supported the exchange first a September 2022 Terra Classic combustion tax of 1.2%, even before the proposal was passed.
Other exchanges, including Crypto.com, MEXC, and Binance, only later declared support for the incineration tax.
But after the proposal was passed, data implied that the increase reduced trading volume for LUNC. Many investors stopped trading the asset due to the spike in fees.
Following the outcome, the LUNC community voted to lower the burns tax to 0.2%, attract the support from crypto exchanges like Binance.
Following the reduction, the Terra Classic community came up with another proposal to increase the burn tax rate, but it was not executed.
Latest incineration tax increase proposal, 3 more get massive support
While other proposals to increase the burn tax after cutting it from 1.2% to 0.2% failed due to various debates and arguments, the latter received massive support.
One of the reasons proposal 11515 was passed was the conservative increase, which would not increase fees and would discourage investors.
The proposal was primarily aimed at reducing the excess supply of LUNC tokens in the market to avoid oversaturation and the associated risks.
But it’s not the only proposal submitted to the LUNC community. An active member raised 3 other proposals, plus the increase in the tax on burns to strengthen economic policies on the network.
The three others focused on increasing demand by increasing wagering rewards, whitelisting smart contracts to increase utility and volume of the chain, and increasing funding from community pools to increase developer funding. strengthen.
-Featured image from Pexels, chart from Tradingview