What is Tax2Gas ?

Definition:

Tax2Gas is one of the new burning mechanisms that helps to reduce the supply of Luna Classic (LUNC) and USTC. Even though there is an existing token-burning mechanism on Terra Luna Classic, its community believes that Tax2Gas is more efficient.

Tax2Gas is a way of introducing token burning directly to the LUNC gas fees. Thus, the new Tax2Gas proposal simplifies the LUNC token burning, eliminating separate implementation and heavy calculations.

Description:

Tax2Gas is the token burning strategy that is set to implement on the Terra Luna blockchain to accelerate the LUNC burning process.

The Terra Luna Classic community members opined that it is important to bring back developers onto its blockchain to revive it fully. When developers again start to build on the project, helping improve its on-chain activity, it could result in re-pegging USTC’s value to the US dollar.

The Terra Luna Classic community recently proposed an increase in burn tax to 1.5%. While it brings the original 1.2% burn tax back, remaining 0.3% will be used to fund the chain developments. Another noteworthy aspect of the Tax2Gas system is it streamlines the token burning process by applying token burning directly and seamlessly to the gas fees.

Even though the Tax2Gas gained support from a majority of Terra Luna Community members, others are opposing it. Because, when the Tax2Gas implements token burning on-chain, it could prevent the on-going LUNC token burning by the Binance exchange.

Binance contributed to almost 50% of the LUNC token burning so far and holds a crucial place in the overall LUNC token burning. When the new Tax2Gas strategy of burning tokens on-chain is implemented, it could halt Binance’s off-chain token burning. While there is some truth to this argument, implementing on-chain burning is also a good idea when it comes to simplifying the burning process.

While some concerns rose regarding Binance’s token burning process, others believe that the new Tax2Gas could repel builders away who expect high gas fees. There seems to be a possibility that Tax2Gas could discourage developers from building dApps on Terra Luna.

However, the Terra Luna Classic community and development team are doing everything they can to revitalize the blockchain and bring back its former glory. The new Tax2Gas is one of their trials to streamline the token burning process, to attract new developers, and finally to repeg USTC’s value to the US dollar.

Even though the Tax2Gas system received a majority of votes in Terra Luna Classic governance, we might need to wait some time for it to be implemented.

Trending

Trump-backed WLFI passes governance vote for a 100% buyback-and-burn plan, boosting bullish sentiment after a 60% price decline.

Trump-Linked WLFI Passes 100% Buyback & Burn Proposal, Analyst Eyes Bullish Surge

Nasdaq-Listed AlphaTON Kicks Off Treasury Strategy, Buys $30M in Toncoin After $71M Raise

Plasma and Tether tokens displayed together, symbolizing stablecoin-backed blockchain integration.

XPL Token Soars 52% as Plasma Mainnet Launch Ignites Trading Frenzy

About author
Disclaimer

Ezra Icy, the creative wizard from Phoenix, Arizona, specializes in crafting magnetic content for Web3 brands. In the digital realm, he doesn't just connect users; he orchestrates a symphony of community and human bonds. Connect with Ezra in transforming pixels into unforgettable moments and turning the virtual landscape into a warm, welcoming oasis of connection only at [email protected]

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

Share on

Follow on Twitter

Share on

Follow on Twitter