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New Terra LUNA Classic Tax Burn Means It Could Take 30 Years to Destroy 10 Billion LUNC

New Terra LUNA Classic Tax Burn Means It Could Take 30 Years to Destroy 10 Billion LUNC

New Terra LUNA Classic Tax Burn Means It Could Take 30 Years to Destroy 10 Billion LUNC

  • The LUNC community has voted to scale the tax burn rate from 1.2% to 0.2%.
  • The choice met with the community’s grand reception, highlighting the high participation rate. 
  • However, at this rate, LUNC is currently calculable to realize its goal of reaching a provide of 10 billion in over twenty-eight years.

With Proposition 5234, the Terra LUNA Classic community chose to lower the LUNC tax burn rate for on-chain transactions from 1.2% to 0.2%. Tax Burn is a mechanism to prop up the crypto price by destroying 10 billion LUNC from the total supply. The change is expected to take effect at 12:50 UTC on October 19.

New Terra LUNA Classic Tax Burn

The Terra LUNA Classic community enthusiastically received the decision to change the LUNC tax consumption rate. Many praised the grassroots efforts behind the proposal. After the Terra LUNA Classic government approved the initiative, Twitter user Akujiro noted that community members had submitted it. Akujiro said the proposal had an 82% approval rating and included cryptocurrency exchange KuCoin’s participation for the first time. “We are decentralized, I encourage everyone to start discussions and take action,” Akujiro concluded. 

Meanwhile, Twitter user 4lex_4sh4w_TR also highlighted the “incredible community engagement,” citing an 83% engagement rate. This milestone was reached even though about a quarter of the validators did not vote. The abstention voted yes. In response to the approval of the community initiative, cryptocurrency exchange Binance announced that it would make updates. Deposit and withdrawal fees change when the LUNC tax-burning mechanism kicks in. “Binance will reduce the 1.2% consolidation fee on all LUNC and USTC deposits received by Binance to 0.2%. Please note that LUNC and USTC deposits on Binance are still subject to withdrawal fees that other exchanges or platforms may impose. Users will receive the withdrawal amount minus the withdrawal fees charged by Binance and the 0.2% tax burn,” reads the announcement.

Nearly 30 Years to Burn 10 Billion LUNC

With the lower reduction rate now in place, the LUNC tax burn mechanism’s overall goal is expected to last much longer. Based on an estimate by LUNC Burner, with a 0.2% LUNC control burn rate, Terra LUNA Classic will meet its goal of destroying 10 billion LUNCs in approximately 28 years and nine months. Website data shows that about 22,428,000,000 or about 0.325756% of the total LUNC supply has been burned to date.

Total supply is calculated as chain supply, subtracting the amount of LUNC burned. According to CoinGecko, there are currently 6,907,072,876,045.

LUNC Price Action

LUNC price is struggling, down nearly 29% since October. The Tom DeMark Sequential Indicator (TD) provided a buy signal on the daily chart of Terra LUNA Classic. The bullish formation suggests that if the LUNC price sustains above $0.00024, it could rally to $0.00026 or even $0.00028. If the LUNC price fails to maintain above the $0.00024 support, it might invalidate the bullish formation. This may lead to a drop to $0.00021.

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