Cryptocurrency

Binance to add opt-in button for 1.2% LUNC burn tax on all trades

Zegex

Binance CEO Changpeng Zhao (CZ) was asked if Binance plans to apply a 1.2% tax on Terra Luna Classic (LUNC) off-chain transactions.

CZ answered the question in a Twitter AMA, stating that Binance will add an opt-in button for those who wish to apply the burn.but he later Posted A blog post introducing the “voting” mechanism for writing.

Binance announced on September 9 that it will apply a 1.2% tax burden only to on-chain transactions such as deposits and withdrawals. Binance.

CZ mentioned the involvement of game theory and said that the tax burn will not work unless all centralized exchanges in the world apply it. he wrote:

โ€œIf Binance charged 1.2% per transaction, I don’t think we would burn much as most LUNC traders would go to other exchanges that don’t burn.โ€

That being said, CZ also acknowledged the desire of LUNC holders to see supply dwindle and demonstrated their willingness to listen to the Binance community.

burn opt-in

In his blog post, CZ introduced a three-step plan for deciding whether to apply a tax burn.

The first step in the plan is to implement an opt-in button for LUNC tax liability. This button is visible to his LUNC owner and can be toggled on if he wants to burn 1.2% of his LUNC on each transaction.

If the number of users choosing to implement the tax burn exceeds 25% of the total LUNC held on Binance, the exchange will proceed to Phase 2 and offer 1.2% tax to all traders who choose to opt-in. Claim your burn. for it.

This burn applies only to those willing to burn their tokens. CZ explained the need for this step by stating:

โ€œThis prevents people who don’t have LUNC from influencing votes. It also gives early adopters peace of mind that they’re not the only ones paying the extra 1.2%. Only 25% of people will apply it, which should make it easier for them to opt in.โ€

Finally, if the number of opted-in users exceeds 50% of the total LUNC held on Binance, the third step of the plan will kick in, applying a tax burn to all LUNC transactions in Binance. increase.

CZ concluded that if the required 50% is not reached in the second step within one month of the completion of step 1, the opt-in button will be removed entirely.

Posted In: Binance, Exchanges

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