Summary:
- Binance has opted to implement the Terra tax burn feature on trading fees.
- The trading fees collected from trading LUNC pairs will be immediately sent to the LUNC burn address.
- Binance had earlier stated that users would decide whether to participate in the tax burn through an opt-in button.
The largest digital asset exchange in terms of trade volume and users, Binance, has announced that it will implement a burn mechanism on all trading fees on LUNC spot and margin trading pairs.
The fees collected from trading these pairs will be immediately sent to the LUNC burn address. The team added that the amount of LUNC burned, its equivalent value in USDT, and on-chain transaction ID will be updated each week until further notice.
CZ is A Marketing Genius – Fatman Terra
The move by Binance to incorporate trading fees in the LUNC tax burn mechanism has elicited positive comments from the crypto-twitter community. One such comment came from popular Terra community member @FatManTerra, who thought implementing the burning feature with trading fees was a good idea by CZ.
He said:
He’s burning Binance’s trading fees instead of implementing a burn tax on transactions themselves.
Gives users what they think they want, keeps whales happy & on the platform, keeps liquidity intact.
CZ is a god damn marketing genius.
Binance Had Earlier Announced an Opt-in Feature for the LUNC Tax Burn
Late last week, the team at Binance also announced the launch of an opt-in button for LUNC traders and community members who wanted to include the new 1.2% tax burn on each transaction.
This plan, which has since been replaced with the one above that includes the burn in trading fees, allowed LUNC holders on the exchange to decide for themselves when to implement the tax burn. Binance would then aggregate the number of accounts that have opted in to decide whether to enforce the tax burn on LUNC transactions.
The thresholds for its implementation were as follows.
- When the accounts which have opted in reach 25% of the total LUNC held on Binance, the 1.2% tax burn will be implemented for all opt-in traders. This was meant to prevent people who do not hold LUNC from affecting the calculations on when to implement the feature. It also gave early LUNA adopters peace of mind that they were not the only ones paying the additional 1.2%.
- When the opt-in traders reach 50% of the total LUNC trade volume on Binance, the exchange will implement the tax burn on all LUNC trading. This would prevent large whales who hold large amounts but do not trade from influencing the calculations for the tax burn implementation.