Terra Labs reduces LUNC burning tax, reveals 4-year revival plan for LUNA

The LUNA-UST crash wiped nearly $40 billion off the crypto market and brought a nightmare to Terra ecosystem investors. This is one of the biggest explosions in the crypto market that took place in May of this year.

Now Terra developers are currently looking to return to LUNA with a 4-year revival plan amid the crypto winter and co-founder Do Kwon violated Korea’s Capital Markets Act.

LUNA and revival plan

Despite the fact that founder Do Kwon faces arrest warrants from Korean authorities and international agency Interpol, Terra’s remaining development team has come up with some plans to revive and push LUNA forward. South Korean government authorities have been searching for Kwon since September; however, Kwon insists he’s not running away.

Terra Labs has now introduced ‘Terra Expedition’is an enhanced version of Terra’s developer mining and affiliate program, conceived during the founding of Terra.

Terra Expedition will be funded with 9.5% of the total supply of LUNA, decided upon the introduction of LUNC (old LUNA), which is Terra’s new blockchain after the LUNA crash. It should be noted that the birth of LUNC is also a revival plan to bring back LUNA’s old reputation.

Terra Expedition’s incentive program will continue for four years, and evaluation of the proposal will be conducted annually by a community-elected committee.

The main motive behind this revival plan was to attract investors and developers to the LUNA network, in order to gradually bring in liquidity.

The proposal states, “Terra Expedition is a four-year program that aims to grow the Terra ecosystem through a series of initiatives with three main goals: to encourage developers to build on top of that. Terra, increase liquidity on Terra and refer users to Terra.”

Second chance for LUNA?

According to the proposal, 20 million LUNA tokens are assigned to the incentive program. Furthermore, the program will provide exclusive rewards, including a $40K bonus to developers for successfully building a project with smart contracts on the LUNA network.

Some of the network projects that can be developed include decentralized applications, lending protocols, stablecoin issuers, and derivative protocols. The proposal states that LUNA tokens will be circulated quarterly in the network.

Another distribution of 50 million LUNA tokens has been proposed for the mining incentive program, which will be distributed over the next four years. This fund will be used to implement initial liquidity of projects built on the network.

Furthermore, Terra developers have also proposed another five million tokens to give users as an incentive to use projects on the network and mint NFTs on the platform.

However, it appears that such a token distribution will only benefit some protocols and may not bring any significant changes to the LUNA ecosystem.

LUNC reduces burning tax from 1.2% to 0.2%

In order to encourage users to trade again, one of Terra Classic’s notable moves recently is to reduce the coin burning tax. Proposal 5234 to adjust the coin burning fee from 1.2% of the transaction value to 0.2% was passed in September. But in reality, the 1.2% coin burning tax has made users more reluctant to trade LUNC than before, when the block Transaction volume on the blockchain has dropped by 91.67% since the change was introduced.

In the 18 days before October 11, the Terra Classic blockchain only recorded a transaction volume of about 367.06 billion LUNC, an average of 20.39 billion / day. Before the application of the coin burning tax, in just 12 days, Terra Classic had 2,349.06 billion LUNC transactions, equivalent to 195.76 billion / day.

In addition, of the total 14.85 billion LUNC burned, 46.22% of which came from CEX exchanges, showing that Terra Classic users seem to have little interest in burning coins. It is estimated that at this rate, Terra Classic will take 20-60 years to realize the goal of bringing the total supply to only 10 billion LUNC.

In addition to the fact that the tax rate directly affects the transaction value, which has been pointed out by critics of the LUNC burn tax from the beginning, Proposition 5234 argues that the tax was not met because of the waste of money burned instead. for using it to fund protocol development.

Therefore, Proposition 5234 has called for reducing the coin burning tax from 1.2% to 0.2%, as well as setting aside 10% of it as an ecosystem development fund. Proposition 5234 was voted on on October 18. The respective Binance exchange has updated the LUNC deposit/withdrawal fee to 0.2%.

Related: Binance after the first week of burning LUNC fees