Do Kwon's Terra Classic LUNC enters top 30, token sees over 20% rise in 24 hours. Here's why4 min read 08 Sep 2022, 10:32 PM IST
The upside in Terra Classic LUNC is on the back to the 1.2% tax burn proposal which has received approval from the Terra community. Due to strong buying, the LUNC token has entered into the top 30 cryptocurrencies.
Investors are upbeat on Terra Classic LUNC, the rebranded token of the original Terra chain, on Thursday. The token has gained by nearly 21% in the last 24 hours. Also, its market cap reached nearly $3.5 billion. The LUNC token has skyrocketed nearly 3,051% since its flash crash in mid-May. The upside in Terra Classic LUNC is on the back to the 1.2% tax burn proposal which has received approval from the Terra community. Due to strong buying, the LUNC token has entered into the top 30 cryptocurrencies.
The journey of Terra tokens has been bittersweet this year, mostly bitter. In mid-May, amidst macroeconomic uncertainties that fuelled a deep bearish tone in global markets, had also made cryptocurrencies vulnerable. The worst to be hit were Terra tokens USD which erased its peg of $1, and its sister Luna which hit zero levels. This led to the wiping out of a reportedly $40 billion corpus. The Terra crash has made many investors, exchanges, and firms poor. The cryptocurrency market is still in the recovery stage from the Terra crash.
In May this year, Terraform Labs co-founder Do Kwon launched Terra 2.0, under which, the original Terra chain has been rebranded as Terra Classic, while a new chain called Luna was created with the existing name Terra and made available for trading.
Terra Classic's 1.2% tax burn proposal
The Terra Community has passed Proposals 3568 and 4159, under which, a 1.2% tax burn for on-chain transactions of LUNC and USTC on the Terra Classic network, will be introduced.
These proposals are being developed to change the tax parameter from its current value of 0 to 0.012 (1.2%).
As per the Terra governance, the 1.2% tax will be applicable on all currency denominations currently available on-chain, including LUNC and USTC.
Terra's 1.2% tax burn is expected to go live on September 20 at the Terra Classic block height of 9,475,200 after the proposal is submitted.
Crypto exchanges supporting Terra Classic LUNC's 1.2% tax burn proposal
On Thursday, Binance announced that they will review and amend the minimum withdrawal amount, maximum withdrawal amount, and withdrawal fees for LUNC and USTC via the Terra Classic network.
Binance highlighted that once the tax burn is live, deposits and withdrawals of LUNC and USTC via the Terra Classic network will be affected in the following manner:
Deposits: Transactions will be taxed by the Terra Classic network before it reaches Binance. The balance will be credited to your Binance account after the 1.2% tax deduction by the network.
Withdrawals: Users will receive the withdrawal amount minus withdrawal fees charged by Binance and the 1.2% tax deduction by the network.
"Spot and Margin trading for LUNC and USTC, as well as relevant services on Binance Earn (e.g., Binance Staking, Binance Savings), will not be affected by this tax burn," the Changpeng Zhao-backed cryptocurrency exchange said.
Other cryptocurrency exchanges MEXC Global, Kucoin, and Gate.io have announced to support Terra Classic’s 1.2% tax proposal.
In its notification, Gate.io on September 6 said, "Gate.io supports the community's development proposal as always. We will implement the proposed on-chain burn on LUNC and USTC if the proposal is approved. As an exchange, the trading of LUNC and USTC is not on-chain activities and will not be charged the tax. If you want to avoid the potential on-chain tax on deposits, it is highly recommended that you should deposit LUNC and USTC on Gate.io before September 12."
Meanwhile, on September 7, Kucoin said that they "will support the 1.2% tax burn when the proposal is officially approved and implemented on Terra Classic (LUNC) mainnet." Further, the crypto exchange assured that services on KuCoin will remain unchanged if the community does not approve the proposal.
"To avoid the potential increase of the deposit fee cost, we strongly suggest users to deposit all the mainnet Terra Classic (LUNC) tokens into KuCoin before September 12, 2022," KuCoin said.
Similarly, a day ago, MECX said, "MEXC will support the 1.2% tax burn when the proposal is officially approved and implemented on Terra Classic (LUNC) mainnet." Assuring that the services will remain unchanged on MEXC, the crypto exchange also suggested investors to deposit all mainnet LUNC tokens before September 12 to avoid deposit fee costs.
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