Terra fell so low that the crypto community did not rule out a total eclipse. This until Do Kwon has decided, with the aid of forking, to give birth to the new Terra Classic blockchain, with its Luna Classic Token (MON). Three months later, and against all expectations, the LUNC surprises investors, it was up 330% 3 days ago. A connection with the new tax imposed on transactions on chain of LUNC and USTC?
A fee for LUNC and USTC
BTCC recently reported that the Terra Classic blockchain has implemented a new mechanism for burn transaction tax on chain of LUNC and USTC. Valued at 1.2%, this tax would be the solution adapted to the excess supply of LUNC.
As a reminder, Terra suffered a fatal fall that hurt the situation of several investors last May. After the hard fork Suggested and brought to life by Do Kwon, the new Terra Classic blockchain token, LUNC, seems to be back on track.
However, a doubt hangs over the availability of the token since the collapse of the market. To remedy this, the Terra Classic team decided to impose a 1.2% tax on all transactions in LUNC and USTC. Basically, it will apply to any holder of wallet and to all smart contracts established on the network. However, transactions made on a crypto exchange will be exempt from this tax.
The objective being the management of the Terra Classique surplus, or quite simply the burn of his assets. It is known that currently there are approximately 6.15 trillion LUNCs in circulation. By changing hands daily, these tokens will gain in value since there will only be 700 billion LUNCs burned. Remember that the more a crypto currency goes through the fire, the more its price increases.
Nevertheless, this new mechanism also has its drawbacks, to name only the increase in the cost of transactions on chain.
Binance joins
Yesterday, Binance has let Binancians know that it has adhered to Proposals 3658 and 4159 relating to this transaction tax on chain of LUNC and USTC. Thus, the most popular crypto exchange will evaluate and modify the minimum withdrawal amount as well as the fees via the Terra Classic network.
Scheduled to be applied from next September 20, this tax burn will charge the equivalent of the 1.2% rate by the Terra Classic blockchain, well before each deposit on Binance. As for withdrawals, the CZ exchange has promised users to receive the withdrawal amount deducted from the platform withdrawal fee and the network burn fee.
It should also be noted that cash and margin transactions for the two assets mentioned above, as well as the relevant services on Binance Earn, will be spared.
Being the most used exchange for LUNC trading, registering a trade volume of 300 million dollars in just 24 hours, Binance did well to consider this proposal. However, it is very likely that this volume will drop in view of the transaction costs which will be revised upwards. Fortunately, said tax burn created positive reactions among investors to the point of propelling LUNC to the top step of the podium.
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of daily and weekly so you don’t miss any of the essential Tremplin.io!
