Technology

Crypto: Terra Classic (LUNC) explosion, tax story?

Fri 09 Sep 2022 ▪ 14:00 ▪
four
min. read – by
Mikaya ANDRIAMAHAZOARIMANANA

Terra has fallen so low that the crypto community has not ruled out a total eclipse. That was until Do Kwon decided to use a fork to create a new Terra Classic blockchain with his Luna Classic (LUC) token. Three months later, contrary to all expectations, LUNC surprises investors, 3 days ago it rose by 330%. Link to new tax on LUNC and USTC on-chain transactions?

Fee for LUNC and USTC

BTCC recently announced that the Terra Classic blockchain has implemented a new tax deduction mechanism for on-chain transactions from LUNC and USTC. This tax, estimated at 1.2%, would be a solution adapted to LUNC’s excess supply.

Recall that in May last year, Terra experienced a fatal fall, which worsened the situation of several investors. After a hard fork proposed and implemented by Do Kwon, the new Terra Classic blockchain token, LUNC, seems to be back on track.

However, doubts about the availability of the token hung after the market crash. To remedy this, the Terra Classic team decided to impose a 1.2% tax on all transactions in LUNC and USTC. Essentially, this will apply to any wallet holder and to all smart contracts installed on the network. However, transactions made on a crypto exchange will be exempt from this tax.

The goal is to manage Terra Classique’s surplus or, more simply, burn its assets. It is known that there are about 6.15 trillion LUNCs currently in circulation. Changing hands daily, these tokens will rise in value as only 700 billion LUNCs are burned. Remember that the more a cryptocurrency goes through the fire, the more its price rises.

However, this new mechanism also has its drawbacks, if only to mention the increase in the cost of transactions on the network.

Binance joins

Yesterday, Binance informed Binancians that it is adhering to proposals 3658 and 4159 regarding this tax for transactions on the LUNC and USTC network. Thus, the most popular crypto exchange will evaluate and change the minimum withdrawal amount, as well as the commission through the Terra Classic network.

This incineration tax, scheduled to apply from September 20, will charge the equivalent of the 1.2% rate on the Terra Classic blockchain well in advance of every deposit on Binance. In terms of withdrawals, CZ exchange promised users to receive the withdrawal amount deducted from the platform withdrawal fee and the network burning fee.

It should also be noted that cash and margin operations for the two assets mentioned above, as well as related services on Binance Earn, will be maintained.

As the most used exchange for LUNC trading, having registered $300 million in trading volume in just 24 hours, Binance did the right thing by considering this offer. However, it is very likely that this volume will decrease due to transaction costs, which will be revised upwards. Luckily, the tax cuts in question generated a positive reaction from investors, to the point that LUNC climbed to the top step of the podium.

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Mikaya ANDRIAMAHAZOARIMANANA avatar
Mikaya ANDRIAMAHAZOARIMANANA

Blockchain and crypto revolution is in full swing! And on the day that the most vulnerable economy of this World is being hit, against all hope, I will say that I had something to do with it.

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