Terra Luna Classic Community Rejects Tax Proposal: Key Takeaways

 

The Terra Luna Classic community has decisively voted against a recent proposal to raise the burn tax to 1.5%. This move underscores the community's dissatisfaction with frequent attempts to alter the burn tax, particularly when such proposals lack substantive justification.

Reasons Behind the Rejection

Proposal Details:
Proposal number 12105, which sought to increase the burn tax, was met with substantial opposition. Critics labeled it as an illogical and lazy effort. Importantly, this proposal was a text proposal rather than a parameter change, meaning its approval would not have automatically resulted in a tax adjustment.

Voting Outcome:
The proposal garnered only 21.35% "yes" votes, while 32% voted "no," and a significant 38% cast "no with veto" votes. Validators cited several reasons for their opposition, including insufficient data, lack of complementary strategies, and the absence of volume projections to justify the tax increase.

Recent Community Actions:
In contrast, the community recently approved a proposal to redirect the distribution of the burn tax from rewards to the oracle pool. This proposal saw a significant 70% "yes" vote, supported by 37 validators, indicating a preference for more strategic and data-backed initiatives.

Impact on LUNC Price

The decision has set the Terra Classic burn tax at 0.5%, with 80% allocated for burning and the remaining 20% equally divided between the Community Pool and the Oracle Pool. Currently, LUNC is trading at $0.0001150, following a 2% decline in the last 24 hours. The lowest and highest price points recorded were $0.0001143 and $0.0001207, respectively.

Market Reactions

Trading Volume:
In the past 24 hours, LUNC trading volume surged by 31%, indicating heightened interest from traders. Meanwhile, USTC, a former stablecoin, held steady at $0.02269 after a 1% drop, with its price fluctuating between $0.02246 and $0.02377.

Actionable Insights

1. Community Sentiment: Understanding and addressing community concerns is crucial for the success of proposals.
2. Data and Strategy: Proposals need thorough data and strategic planning to gain support from validators and community members.
3. Market Awareness: Monitoring market reactions can help gauge the impact of community decisions on trading volumes and price stability.

Conclusion

The Terra Luna Classic community’s rejection of the burn tax increase proposal highlights the need for well-founded and logical initiatives. Moving forward, the focus will be on maintaining price stability and fostering community-driven decision-making. This episode serves as a reminder of the importance of robust data and clear strategies in gaining community and validator support.