Binance Confirms Support For Terra Luna Classic (LUNC) Tax Burn

The world’s top exchange will support Terra (LUNA) Tax Burn.

Notice on Tax Burn for $LUNC and $USTC on Terra Classic $LUNC Network.https://t.co/1TH6sljgka

— Binance (@binance) September 8, 2022

According to Binance, it will amend the minimum withdrawal amount, maximum withdrawal amount, and withdrawal fees for LUNC and USTC via the Terra Classic network once the Tax burn goes live on Sep 20th.

Binance writes:

“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.”

However, Binance has still not confirmed taxing LUNC trading. The exchange further says that Spot and Margin trading for LUNC and USTC will remain unaffected when Tax burn goes live.

LUNC community is stressed by Binance’s decision for not applying tax burn to LUNC trading as LUNC DAO says:

“Extremely disappointed in CZ for not keeping his word. Applying the 1.2% tax to withdrawals and deposits only discourages people from leaving Binance. They are not applying the LUNC burn to the spot + margin trading, AKA what the community asked for.”

Terra LUNC Burn Proposal

It is noteworthy that the Terra community has been calling on TFL to burn part of the LUNC supply to compensate investors for the losses they incurred in early May 2022 after UST lost its peg to the dollar. 

Despite investors’ wishes, TFL abandoned the LUNC project to launch a new chain and tokens, which it believed to be the perfect way to compensate investors. However, TFL’s effort was insufficient to compensate the Terra ecosystem collapse victims. In June 2022, investors voted that a 1.2% tax burn should be applied to all LUNC on-chain transactions. All LUNC tokens obtained via the tax initiative will be permanently destroyed, thus reducing the total supply of the asset class and ultimately bolstering its value. 

If went live on Sep 20th, the 1.2% tax proposal will see users pay a 1.2% fee on all on-chain transactions, including wallet interactions and smart contracts. This fee is then sent to the Terra-provided burn wallet to reduce the LUNC supply. Notably, the parameter change can not be applied to exchanges without the support of exchanges. Consequently, this has been a cause for concern for some users as most LUNC transactions occur on central exchanges.

However, major exchanges like Binance, MEXC global, Kucoin, and Gate.io have confirmed to support LUNC Burn.