Three Top Exchanges Follow Binance to Reduce Terra Classic (LUNC) Tax Burn From 1.2% to 0.2%.
More exchanges declare support for Terra Classic tax burn reduction.
Three cryptocurrency exchanges announced they would implement the Terra Classic proposal to reduce the tax levied on LUNC and USTC on-chain transactions.
The development comes hours after Binance said it would comply with the recent proposal passed by the Terra Classic community.
After Binance declared support for the initiative, top cryptocurrency trading platforms, including KuCoin, OKX, and Crypto.Com, followed the same path.
Crypto.com noted in an announcement today that it will reduce the tax burn parameters for Terra Classic tokens’ on-chain transactions, including deposits and withdrawals, from 1.2% to 0.2%. However, deposits and withdrawals for Terra Classic tokens will still incur the regular fees.
🚨 Updates to the Tax Burn for LUNC on Terra Classic (LUNC) Network 🚨
✅ Tax burn rate reduced to 0.2%
🗓️ Effective since 19 October 2022, 12:50 UTC
— Crypto.com (@cryptocom) October 20, 2022
OKX Supports LUNC Tax Burn Reduction
In a similar development, OKX stated that it would also support the tax burn reduction levied on LUNC and USTC on-chain transactions. The exchange noted that it will reduce the tax burn for USTC and LUNC from 1.2% to 0.2% later today.
“OKX will make the following updates to the deposit and withdrawal fees for LUNC and USTC on the Terra Classic network once the new tax burn mechanism is live,” the exchange noted.
OKX noted that it will halt deposits and withdrawals for Terra Classic tokens today at 11:00 UTC, to implement the changes.
KuCoin also joined other exchanges to announce support for reducing LUNC and USTC tax burn.
“KuCoin will support the tax burn deduction of Terra Classic (LUNC) and Terra Classic USD (USTC) tokens when the 0.2% tax burn goes live at the Classic Terra block height of 9,878,400,” the exchange noted in an announcement.
Rationale Behind Tax Burn Reduction
The move to reduce the tax burn for on-chain transactions of LUNC and USTC on the Terra Classic network from 1.2% to 0.2% is part of efforts to boost the trading volume of Terra Classic tokens.
Since the 1.2% tax burn was implemented last month, there has been a huge decline in LUNC and USTC trading volumes. Many traders avoided Terra Classic tokens due to paying 1.2% on every deposit and withdrawal. The community decided to reduce the tax burn to 0.2% to attract traders back to LUNC and USTC.
As stated in the newly passed proposal 5234, 10% of the fee will be dedicated to a community pool to fund the project’s development.