Terra Classic’s LUNC Burn Tax Proposal: What You Need to Know

• Terra Classic community is voting on Proposal 12114 to adjust the burn tax.
• The proposal aligns with the upcoming SDK 0.47 shift from block rewards to gas fees for staking rewards.
• Initial support from community members was evident, with 24 votes.

The Terra Classic community is currently voting on a proposal to adjust the distribution of its LUNC burn tax, with a focus on funding the critical Oracle pool. This move follows a similar successful proposal in April and highlights the community’s ongoing efforts to optimize the token’s tokenomics.

A proposal, dubbed “ Proposal 12098 ,” was submitted by community member SrathCole to modify the burn tax distribution. Currently, Terra Classic’s burn tax is set at 0.5%, with 20% allocated to burning and 20% to distribution, including 10% each to the Terra Classic Community Pool and rewards.

Strathcole proposes a redistribution of the tax burn, with 80% allocated to burning, 10% to the community pool, and 10% to the Oracle pool, replacing rewards. This adjustment aims to improve the tax distribution, ensuring long-term staking rewards and block rewards consisting solely of gas fees.

Former L1 Joint Task Force developer Frag has submitted another proposal, “ Proposal 12114 ,” to formally approve the changes outlined in Srathcole’s proposal. The new proposal, submitted on June 9, has a seven-day voting period.

The proposal is yet to be approved, partly due to the absence of influential validators such as Allnodes, which commands 14.66% voting power. Nevertheless, other operators have voted to support the new proposal, with 24 votes cast and 1 abstained. Although further participation is required, the current voter outcome indicates significant backing by community members. 

Christopher, a Terra Classic community member who runs the JESUSisLord validator, is one such proponent. On X (formerly Twitter), he endorsed the new proposal, stating that it will help fund the Oracle pool.

“The oracle pool as of yet has no funding source and is continually being depleted, and it’s important to direct funding to it,” Christopher stated .

As of press time, LUNC trades at $0.00009831, dipping by 2.92% over the recent intraday session.