Binance, the leading cryptocurrency exchange, and largest blockchain ecosystem has been compelled to give a new approach to the LUNC burn initiative following the recently passed proposals in the Terra Classic community regarding the re-minting of a percentage of burned LUNC into the community pool.
About a month ago, a certain LUNC community member Cosmos Capybara submitted Proposal 10983, recommending a change in the RewardPolicy rate to 0.5 which will also allow 50% of all burn transactions in a given epoch to be minted into the community pool as development funds.
Whereas the proposal was endorsed despite mixed reactions in the LUNC community, Matts Market, the co-owner of the LuncLive validator on the Terra Classic network rolled out a counter-proposal (Proposal 11111) that eventually passed.
As stated by Matts, “we do not have the consent or approval of individuals or organizations to remint half of what they are burning. There is a danger of alienating our largest supporters down to our retail investors. I believe it is in the community’s best interest to repeal and replace it to the prior 0.2% tax and 10% of the burn tax to be reminted and sent to the community pool for the time being.”
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Binance To Make Changes to LUNC Burn
Per a recent blog post, CZ’s Binance disclosed that the digital assets exchange will introduce some necessary changes to its LUNC burn approach as a result of the reminting agenda from the Terra Classic community.
According to the exchange, it will continue to contribute to the supply decrease of LUNC but notified that from December 2022, only 50% of the LUNC spot and margin trading fees will be burned instead of 100% in past burn events.
To allow the completion of a few updates that will ensure that LUNC burned by the exchange is excluded from the community’s reminting plan, Binance will delay sending its next batch of LUNC trading fee burn contributions until March 1, 2023. As earlier reported by TimesTabloid, Binance scheduled its next burn event for January 1, 2023.
On this premise, Binance, Edward Kim, and the Terra Grants Foundation team are in talks for a new burn wallet to be created. The aim is to ensure that the exchange’s LUNC burn quantity is not being considered during the community’s reminting exercise. Likewise, Binance is requesting that its wallets are whitelisted so that the transaction tax is not applied when transferring between these wallets.
Consequently, Edward Kim disclosed that his team is in consultation with members of the community and Binance to refactor the burn antehandler.
In consultation with members of the community and Binance, we are looking at refactoring the burn antehandler. Please see the discussion here, https://t.co/zJa67Ug0Su
— Edward Kim (@edk208) December 28, 2022
In addition, Binance warned that the exchange will consider withdrawing its contributions toward the LUNC supply reduction mission if its requests are not granted. “Binance will continue to work with the community to support the implementation of this new plan, and if for any reason this can’t be done, Binance will consider withdrawing the burn contribution going forward,” part of the announcement read.
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Binance withdrawing its support for the LUNC burn initiative would be a huge loss to the Terra Classic community as the exchange is the top contributor to the LUNC total supply reduction mission. Notably, out of the 36,630,545,064 LUNC burned, Binance is responsible for 20,102,986,982.34 units. In their last LUNC burn event, the CZ-founded crypto exchange destroyed 6,389,199,628.21 LUNC derived from trading fees on LUNC Spot and Margin trading pairs.
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