Terra Classic (LUNC) Transfers on Binance (BNB) Will Be Taxed. When?

Chinese crypto journalist and insider Colin Wu noticed that Binance (BNB), a top-tier cryptocurrency ecosystem, is getting closer to the implementation of a tax on LUNC transactions.

Binance (BNB) implements 1.2% burn tax in two steps

Mr. Wu has taken to Twitter to share that the cryptocurrency exchange Binance (BNB) confirmed its decision to implement a 1.2% token burn rate on every transaction.

Binance: When the opt-in accounts reach a holding of 25% of the total LUNC held on Binance, we start to charge 1.2% tax for all opt-in traders when they trade LUNC. When reach 50%, we will roll out the 1.2% trading tax for all LUNC trading. https://t.co/O1kzaKUzx2

— Wu Blockchain (@WuBlockchain) September 24, 2022

The major upgrade will be implemented in two steps. First, when the amount of LUNC tokens stored in “opt-in” (“approving”) accounts, the tax will be applied to “opt-in” traders only.

Then, once the limit of the LUNC share stored by opt-in account reaches 50%, the tax will be implemented to all LUNC transfers for Binance (BNB) users.

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As such, very soon Binance (BNB) might become the largest crypto exchange to adopt LUNC transfer taxation.  

What is LUNC burn tax and why does Terra Classic need it?

As covered by U.Today previously, the implementation of a 1.2% tax on LUNC and USTC trading and transfers catalyzed interest in the Terra-backed stablecoin and the native crypto asset.

The “burn tax” was applied to make the LUNC token deflationary and to avoid dangerous pumps and dumps. In turn, this makes the tokenomics of Terra Classic (LUNC) more predictable.

Terra Classic (LUNC) and TerraClassicUSD (USTC) are two assets issued on the canonic Terra (LUNA) blockchain after its collapse.