Proposal 11243 has been launched and regular validators in the Terra Classic community have begun voting on it. The proposal aims to increase LUNC transaction fees by 5 to denounce the Seigniorage Reward Policy that remints 10% of LUNC burned tokens.
Why is the Need for the Proposal?
The proposal, which was submitted by a pseudonymous Terra Classic community member, Dfunk, is targeted at boosting the already-defeated LUNC rate.
Read Also: Binance Introduces a Notable Change to LUNC Burn in Response to LUNC Reminting Consideration
It can be recalled that Binance has decided to reduce its usual burn by 50%, which will further affect the burn rate and make LUNC revival a relatively impossible mission.
Over the last month, relatively 100 million LUNC tokens from the 1 billion LUNC tokens burned have been reminted and moved to the community pool. This was made to happen based on the current 10% Seigniorage Reward Policy rate, which the current proposal aims to denounce.
Concurrently, the network registered 2 billion LUNC in transaction fees in the past month. Out of the total amount registered, 1 billion has been sent to the community pool, indicating that the community pool generates more funds from transaction fees than the Seigniorage Reward Policy.
The summary of the proposal says:
“This proposal aims to deprecate the Seigniorage Reward Policy (effectively stopping LUNC re-minting from burns) and increase gas fees by 5X to capitalise the Community Pool and increase Validator/Staking Rewards.”
Read Also: How Terra Rebels Scam Allegations Could Force Binance To Stop Supporting LUNC Burn Mission
The proposal that was launched about two days ago has garnered votes from 19 validators, while 123 validators have not voted. 16 of the respondents voted “Yes”, 1 voted “No”, another voted “No with veto, and the remaining 1 abstains.
It’s worth noting that Allnodes, the LUNC validator with the highest voting power, has not voted on the new proposal.
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