Terra Classic, formerly the primary network of Terra and now a sub-chain, is an open-source blockchain protocol that allows the creation and deployment of decentralized applications. It operates on a Proof-of-Stake (PoS) consensus mechanism, and its native token is LUNC. By staking LUNC, token holders can submit and vote on proposals to participate in community governance.
● Proposal to reduce burn tax
Terra Classic community has proposed to adjust the burn tax, suggesting a decrease in the tax rate to 0.2% and setting aside 10% of the tax revenue to finance ecosystem infrastructure and contributors.
The proposal argues that a higher tax rate could lead to a reduction in on-chain transaction volume, thereby putting Terra Classic at a disadvantage in a highly competitive market. Conversely, lowering the tax rate would encourage more on-chain transactions and help create a thriving ecosystem. By setting aside 10% of the tax revenue to support the ecosystem, Terra Classic aims to attract more users and developers to further promote ecosystem development.
Note: The Burn Tax is a fee that users need to pay when trading cryptos. This fee will be permanently “destroyed” after the transaction is completed, meaning it will be removed from the total supply. Unlike miner fees, which incentivize miners who validate and process transactions, the burn tax is the cost of destroying tokens, designed to control supply and prevent inflation for the benefit of token holders. For ease of use, ViaWallet has included the burn tax in the Tx fee (see the figure below).
Fig. 1: Before the transaction is submitted, the Tx fee only includes the miner fee
Fig. 2: After the transaction is submitted, the Tx fee includes both miner fee and burning tax