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Four proposals related to increasing burn tax, LUNC burn, and staking were passed by the Terra Classic community. The proposals outline key changes including raising the LUNC burn tax to 0.5%, rewarding people for staking, whitelisting Dapps contracts, and increasing community pool funding.
Fearing Binance withdrawing its LUNC burn mechanism, the community denied many proposals related to raising LUNC burn and burn tax. However, the sentiment has now changed after LUNC price fell below $0.000010 last week, reaching levels of last May when TerraUSD (UST) and LUNA prices collapsed drastically.
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Terra Classic Proposal Passed by the Community
The four-part proposals will bring major changes to the Terra Classic network and community. CoinGape Media in a previous report cited reasons why Binance may support the Terra Classic community increasing the LUNC burn tax to 0.5%.
Proposal 11513 “[1/4] Split Burn Tax with Distribution Module”
The text proposal seeks to modify the burn AnteHandler to split the Burn tax to the Distribution Module instead of the Community Pool. This will increase staking rewards and boost demand for staking, indirectly helping validators on the network. The proposal passed with 82% “Yes” votes, supporting to reward stakers for Terra Classic staking.
Proposal 11514 [2/4] Modify the Burn Tax AnteHandler Split from 90/10 to 80/20
As proposal 11513 will impact funding for Joint L1 Task Force, the parameter change proposal aims to modify the Burn Tax AnteHandler split from 90/10 to 80/20 to compensate for lost funding to the community pool. This was passed by the community, with 83% voting in favor of the proposal.
Proposal 11515 [3/4] Increase the Burn tax to 0.5%
The proposal recommends increasing the burn tax to 0.5% from the current 0.2%. It will reduce LUNC supply and boost LUNC price. The proposal has received 75% votes in favor, but created some friction in the community and some believes Binance may withdraw its monthly LUNC burn mechanism.
Proposal 11516 [4/4] Whitelist Dapp Contracts from Burn Taxes
The proposal seeks to whitelist Dapps such as Terraswap and Astroport from burn taxes as Proposal 11515 will cause a drop in the volume and usage of Dapps such as decentralized exchanges.
Top validators including TCB, StakeBin, JESUSisLORD, NITAWA, Classy’s Sphere have decided to support all these proposals.
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LUNC Price To Recover After Upgrade
Terra Classic core developer Joint L1 Task Force (L1TF) prepares for v2.0.1 Upgrade as the community successfully passed Proposal 11511. The Terra Classic blockchain will halt at block 12,815,210, estimated on May 17 at 17:11 UTC. It is followed by the Cosmwasm 1.1.0 Parity upgrade on May 31.
LUNC price fell 1% in the last 24 hours, with the price currently trading at $0.000090. The 24-hour low and high are $0.000088 and $0.000091, respectively.
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