Binance would not apply the 1.2% tax burn for off-chain transactions of Terra Classic (LUNC) and USTC, as revealed by the CEO “CZ ” in an AMA on Friday. As a result, the price of Terra Classic (LUNC) dropped to $0.00024 in just one hour, with Binance holding around 35% of the LUNC supply.
Although the CEO of Binance thinks that off-chain tax burn will affect trade on Binance, the community pressures the cryptocurrency exchange to support it.
Terra Classic community will be supported by Binance, but the implementation of the 1.2% tax burn on off-chain transactions will have an impact on trading on the cryptocurrency exchange.
Additionally, Binance has started charging a 1.2% tax on deposits and withdrawals. However, on-chain transactions such as spot and margin trading, as well as Binance Earn services, will not be subject to the tax burn.
“I think the blockchain should implement the burnt first, but I did not promise saying that right afterwards Binance will do XYZ did not do that, but that people may imply that or infer that, I can see where that’s coming from.”
Terra drops by 10% amid speculations
If transaction fees increase, traders will stop trading, which reduces the blockchain’s usefulness. The Terra Classic (LUNC) community wants the tax burn for off-chain transactions. The consequences of carrying it out, nevertheless, are undoubtedly impractical.
The CEO of Binance, offered another way to introduce a 1.2% trading cost for the burn in a tweet. He envisions a tool that will enable traders to vote with costs and opt-in for a 1.2% trading fee.
The price of Terra Classic (LUNC) dropped by around 10% in an hour when Binance CEO refused to approve the 1.2% tax burn for off-chain transactions. The price of LUNC is currently $0.00025, down almost 11% in the previous day.
The 24-hour low and high of the LUNC trading volume are $0.00024 and $0.00028, respectively. The community is currently looking to sell LUNC or move everything from Binance to Terra, which supports the 1.2% burn tax.