The Chief Executive Officer (CEO) of the world’s largest crypto exchange by trading volume, Changpeng Zhao (CZ), has reiterated that sticking with a lower fee for the LUNC tax burn initiative would yield better results than the current community-approved 1.2% tax on LUNC transactions on the Terra Classic network.
To back up his proposition, CZ, as he is popularly known, shared some calculations which validated the statement he made during the Sunday Ask Me Anything (AMA) on Twitter Space. Recall that CZ had earlier said that high fees signify greed just before Binance extended the implementation of the LUNC tax burn proposal to cover spot and margin trading.
The Binance Chief stated that high charges only discourage users, especially whales from executing LUNC trades, stressing that if the LUNC community intends to burn a greater volume of the Terra Classic native token then a minimal tax levy should be adopted.
According to CZ, high fees don’t lead to high income for the exchange as perceived by some, revealing also that sticking with the community-approved 1.2% charge on LUNC spot and margin trades will not lead to the burning of more LUNC tokens.
It is worth noting that the Binance exchange, which destroyed around 5.5 billion LUNC tokens worth about $1.8 million in just one burn event and 3 billion LUNC recently, is charging a lower fee on LUNC trading activities (0.1%), contrary to the approved 1.2% tax by the Terra Classic community. As stated by the Binance exchange CEO, Changpeng Zhao during the Sunday AMA session:
“To burn more and more LUNC, we need to have a minimal fee so that our LUNC fee revenue becomes the highest, and then we burn all of our revenue,” said CZ explaining that higher fees discourage trading activity. “Just charging more fees does not mean we have more income. Very often, charging more means you have less income. I think most of LUNC members think that if we charge 1.2%, Binance will burn more LUNC, but it is a mistake.” More so, he stressed that his crypto exchange burns all revenue derived from LUNC trading fees as earlier announced.
— Terra Rebels (@TerraRebels) October 11, 2022
Although a few exchanges like MEXC have implemented the 1.2% LUNC tax burn, CZ encouraged more exchanges to implement the burning of LUNC tokens and support the teeming community in their mission to reduce the total supply of the token to 10 billion. “I also encourage other exchanges to do it… But I and LUNC community do not control other exchanges. So it’s up to everybody else; we have done our part,” he said.