• Many CEX have implemented the LUNC 1.2% tax burn proposal
  • Binance initially introduced the opt-in button for the 1.2% tax burn on its platform
  • The idea was criticized by the LUNC community

Binance, the world's largest cryptocurrency exchange platform, has unveiled a new burning mechanism for Terra Classic (LUNC) transactions since the LUNC community "wasn't happy" with the platform's initial burn proposal.

Binance CEO and co-founder Changpeng Zhao, more popularly known as CZ in the crypto world, made an announcement Monday about a major development on how the platform would handle the 1.2% tax burn proposal of the Terra Classic community.

Instead of the previously planned opt-in button, which CZ said would "take a while to develop" and "traders won't vote for," Binance instead has come up with "a better, quicker way to support the community."

Illustration shows a representation of cryptocurrency and Binance logo

Scrapping the old plan, Binance will now "begin burning all trading fees collected on the LUNC/BUSD and LUNC/USDT spot and margin trading pairs on Binance." These fees will be converted to Terra Classic tokens and sent to a dead wallet or burn address to remove them from circulation permanently.

Binance will pay for the burn and will not charge LUNC holders, according to the exchange platform. "This way, we can be fair to all users. The trading experience and liquidity remain the same, and Binance can still contribute to the supply decrease of LUNC, which is what the community wants," CZ noted in a tweet.

In a new blog post, Binance assured that the community will be updated weekly on the amount of Terra Classic to be burned, its value in USDT and other necessary details. "The specific amount of LUNC to be burned, its equivalent value in USDT and on-chain transaction ID will be updated each week in this announcement until further notice," the post said.

Binance also clarified that the new burning mechanism will "not affect BNB fee discounts, fee rebates or any other form of fee adjustment or discount." It also noted that "trading volume on the LUNC spot and margin trading pairs will continue to be counted in the 30-day volume calculation toward Trading Fee Level and Binance Spot Liquidity Provider Program."

The tax burn proposal by the Terra Classic community introduces a 1.2% tax burn on all on-chain transactions where values of crypto deposits and withdrawals to the platform are reduced by 1.2%.