Terra Luna Classic has recently gone through a massive change, the burn has been reduced from 1.2% on every transaction to 0.2% on every transaction. The goal of doing this was to increase on-chain volume. Today was the first day this change was implemented!
The graphic you see above is the Luna Classic transaction volume on-chain day by day for the last 2 weeks. We can see the first day the Terra Luna Classic burn was reduced the on-chain volume has gone up dramatically, even despite our overall 24 hours volume being lower then it usually is. This is a great sign.
However, it is still too early to judge whether or not this is an effective solution long-term. So we will be keeping a close eye on what is to come in the next few days. On this note, many people are making the argument that less LUNC is being burned then before, and while this is true we do have over double the amount of Luna Classic on the chain itself. This is arguably much more important then the miniscule burn difference.
Now another point of fear right now in Luna Classic is the sheer amount of negative price action following this development. We can see sell pressure rising as certain people are uncertain whether or not this change will pan out and be good for the ecosystem. This is pure fear and speculation based off of nothing concrete and factual and should be taken with a grain of salt. There will always be many price gougers and those who are expecting 1000x gains instantaneously in the ecosystem, and they aren't healthy for the long-term prospects of what is being built. I understand being fearful at times like this, but its important to take a step back and look at things rationally. We simply don't know whether or not the reduction in burn tax will be good or bad for the ecosystem yet, at least wait for the data to present itself in the next couple of weeks before jumping to any conclusions.
So has the tax reduction been a success or a complete disaster? The truth is, its too early to tell for sure. However, we can see Luna Classic volume is up on-chain dramatically! This is a huge win, we need as many funds on-chain as possible to contribute to developers who are building on our ecosystem so we can flourish long-term. To me this is a massive win and should be celebrated! In the coming days data will continue to be collected to see how this development is performing so stay tuned to the blog and my YouTube channel for daily updates!
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