KuCoin, a major network, has successfully passed a significant proposal to increase Terra Classic LUNC burns tax to 0.5% after gaining the required votes. As a result, KuCoin will increase the LUNC network burn rate from 0.2% to the proposed 0.5%. The activation of the burn tax will occur at the designated Terra Classic block height of 12,902,399 and will take effect on May 23. Once activated, KuCoin will pay users more for transactions involving the two crypto assets, LUNC and USTC, while reducing LUNC supply. However, the increase could also reduce trading volume, and many other exchanges have rejected similar proposals in the past.
After other exchanges followed KuCoin’s initial support of the September 2022 Terra Classic burn tax of 1.2%, data suggested that the increase reduced the trading volume for LUNC, prompting the LUNC community to reduce the burn tax back to 0.2%.
Despite previous failed attempts, the latest proposal to increase the burn tax has gained massive support due to its conservative increase, which aims to reduce the excess supply of LUNC tokens in the market to prevent oversaturation and its associated risks.
Furthermore, an active member has raised three other proposals, along with the burn tax increase, to enhance economic policies on the network. The other proposals focus on increasing staking rewards, whitelisting smart contracts to enhance chain utility and volume, and increasing community pool funding to bolster developer funding.
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