Binance CEO “CZ” in AMA on Friday pointed out that the 1.2% tax burn for off-chain transactions of Terra Classic (LUNC) is not feasible on centralized exchanges like Binance. He believes another option can be to make users opt-in for implementing the 1.2% tax burn. This will also let people know how many of the voting community support the tax burn. Now, Binance announces adding an “opt-in button” for a 3-step implementation of tax burn on LUNC trading.
Binance Adds Conditions to 1.2% Tax Burn for Terra Classic (LUNC)
Binance, in an official announcement on September 24, proposes a 3-step process for implementing the 1.2% tax burn for off-chain transactions of Terra Classic (LUNC). The steps are:
- Implementing an “opt-in button” that let people approve a 1.2% tax on their Terra Classic (LUNC) trading.
- Starting to charge a 1.2% tax for all opt-in traders when the quorum reaches 25% of the total LUNC supply on Binance. People who don’t vote will not be charged an additional 1.2% tax for their LUNC trading.
- Implementing a 1.2% tax burn for all traders when the opt-in traders reach 50% of the total LUNC trading volume on Binance. It will prevent LUNC whales from influencing votes as they don’t trade actively.
However, if the 25% threshold is not reached within a month of the launch of an opt-in button, Binance will remove the feature.
Some believe Binance CEO “CZ” is right about the decision and let traders decide tax on their trades. While some think it’s important for Binance to support the 1.2 tax burn as it accounts for nearly 35% of LUNA supply.
reXx, a member of Terra Rebels, in a tweet said:
“CZ, I think this needs a bit of more details. How would the bot percentages account for this “vote”? Realistically, bot trading makes up a good percentage of volume. How would this level out a “fair” playing field for manual retail traders to reach 25%-50% voting?”
What “CZ” Believes
Binance CEO “CZ” believes a 1.2% tax burn will make use cases on the blockchain meaningless. Moreover, an increase in charges will impact trading volume on Binance as people will stop trading. In fact, Binance has already implemented the 1.2% tax burn for on-chain transactions.
The Terra Classic (LUNC) price dropped after Binance CEO refuses to implement tax burn for off-chain transactions. The LUNC price is currently trading at $0.00025, down nearly 8% in the last 24 hours.