The 1.2% tax burn is here.
reXx Member of the Terra Rebels announced the update:
happy burning day #FAR community. The 1.2% Burn Tax is officially active.
— reXx™ (@reXxTerraRebels) September 21, 2022
After weeks of anticipation and excitement, the Terra Classic tax parameter change is activated. Consequently, users will be charged a 1.2% tax on all on-chain transactions, and the fees collected will be sent to the Terra Burn wallet to reduce LUNC oversupply.
Notably, this tax rate is set to run until the total supply of LUNC drops to 10 billion tokens. To put things in perspective, the current supply of LUNC stands at around 6.9 billion. To achieve this goal, the supply of assets will have to be reduced by 99.82%.
It is worth mentioning that in a previous analysis made by The basic cryptoBased on user feedback, it will take about a decade for LUNC supply to drop to 40 billion at a 1.2% consumption rate, provided volume and price can be kept low . Notably, according to this analysis, with a hypothetical market capitalization of $40 billion, the asset may reach the price of $1 within seven years. Notably, using this same hypothetical market capitalization and a 10 billion supply on The Coin Perspective reveals that the asset quadruples this price projection and could lock in the $4 price point.
However, it will be interesting to see how the network will continue to keep volume high while keeping the price low even as supply shrinks. What highlighted Per LUNC Burn, an unofficial Twitter account that tracks LUNC burning activity, hours before the burn was triggered, about 4.1 billion LUNCs had been burned without the parameter change. It will be interesting to see how this number changes over time.
Notably, the token ranks third in 24-hour trading volume on Binance, with $210 million at press time.
Meanwhile, two more trading platforms have pledged to support yesterday’s 1.2% tax burn proposal with two very different implementations. While Crypto.com will charge only deposits and withdrawalseToro can also apply it to off-chain transactions (trading), splitting the tax rate between buyers and sellers adding a 6% charge on top of the standard 1% tax for both parties.
At press time, LUNC is trading at a price of $0.0003036, which is 0.55% lower than in the last 24 hours.
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