The 1.2% tax burn for off-chain transactions of Terra Classic (LUNC) cannot be executed on centralized exchanges such as Binance as per its CEO- “CZ.” However, he suggested an alternative that can be employed for performing the 1.2% tax burn. The exchange will provide an opt-in for implementing the 1.2% tax burn. It will also reveal how many voting communities support the tax burn. Now, Binance declares adding an “opt-in button” for a 3-step implementation of tax burn on LUNC trading.
Binance Puts Riders For 1.2% Tax Burn for Terra Classic (LUNC)
An official announcement on September 24 revealed the three-step process for executing the 1.2% tax burn for off-chain transactions of Terra Classic (LUNC). The steps are:
- Process 1-Executing the “opt-in button,” which will enable a 1.2% tax on their Terra Classic (LUNC) trading.
- Process 2: When the lower limit reaches 25% of the total LUNC supply on Binance, a flat tax of 1.2% for all opt-in traders will be implemented. People who do not vote will not be charged an additional 1.2% tax for their LUNC trading.
- Process 3-When the opt-in traders reach 50% of the total LUNC trading volume on Binance, a flat 1.2% tax burn will affect all traders. It will preempt LUNC whales from influencing votes as they do not trade actively.
Binance has attached one more condition-if the 25% threshold is not reached within a month of the launch of an opt-in button, Binance could remove this feature.
Experts opine variedly on how traders decide tax on their trades. While some experts opine that Binance CEO “CZ” is right about the decision and let traders think, others opine that it’s essential that Binance support the 1.2 tax burn as it accounts for nearly 35% of LUNA supply.
Rex, a member of Terra Rebels, in a tweet, said:
“CZ, I think this needs a bit more detail. 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?”