- The new Reverse Charge tax mechanism on LUNC simplifies tax deductions and prevents double taxation, benefiting developers and users alike.
- This update aligns with community-led initiatives to stabilize the LUNC ecosystem, including substantial token burns and infrastructure updates.
A “Reverse Charge” tax mechanism has been adopted by the Terra Luna Classic community to streamline how transaction taxes are handled on its blockchain. This update aligns with the excitement among community members in early November, as CNF reported that Terra Classic (LUNC) recently saw a bullish breakout from an ascending triangle pattern.
Under this new approach, taxes are automatically deducted from the transaction amount before reaching the recipient’s wallet, eliminating the need for senders to pay extra. In a recent tweet by Mr. Diamondhandz1, the official account and host of The Diamond Hour, the Luncliveorg validator voted YES to the $LUNC proposal 12143, which simplifies tax handling and replaces the Tax2Gas approach.
The @Luncliveorg validator has voted YES to $LUNC proposal #12143 which would simplify tax handling and replace the Tax2Gas approach.
We look forward to seeing the new approach tested and implemented by @ColeStrathclyde. Time to bring the builders back to #LUNC. 🛠️💎🤲🏻 #Crypto pic.twitter.com/EY5ytRQA0N
— Mr. Diamondhandz1💎 (@MrDiamondhandz1) November 2, 2024
This update also reduces complexity for developers, who no longer need to implement intricate tax-handling systems for their decentralized applications (dApps). Additionally, the system is backward-compatible, allowing dApps the flexibility to retain the original sender-side tax option if preferred.
Eliminating Double Taxation and Reducing Developer Burden
Before this update, transactions involving smart contracts could be taxed both when receiving and sending funds, adding unnecessary costs and complications for developers and users. A major advantage of the Reverse Charge mechanism is its ability to eliminate double taxation on smart contracts, which was a common issue in the previous system.
Now, taxes are only deducted when funds are sent from a contract to a wallet, making the process fairer and reducing the development burden, especially for those migrating from other blockchain ecosystems.
Community Initiatives Boosting LUNC Stability and Ecosystem amidst Current Market Status
This new tax mechanism complements ongoing community efforts to support Terra Luna Classic’s growth and stabilize the LUNC token. Recent token burns have been integral to these efforts; in the latest burn cycle, Binance burned over 1 billion LUNC, contributing to a total of around 137 billion tokens removed from circulation.
The recent closure of the Shuttle Bridge further demonstrates the community’s commitment, with additional token burns anticipated to support ecosystem stability and the value of the cryptocurrency. Through these initiatives, Terra Luna Classic continues to work toward creating a sustainable and user-friendly blockchain environment.
As of today, Terra Luna Classic (LUNC) is valued at $0.00008206, experiencing a decline of 5.00% in the past day and 10.49% in the past week. See the LUNC price chart below.
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