Terra’s Lead Developer Proposes Compensation for Investors Affected by the Tax Burn Activation
Terra Classic (LUNC) investors may be in for some good news, as head developer Edward Kim announces a proposal to compensate affected investors who lost funds during the 1.2% tax burn activation tokens.
Compensation for Affected Investors
The proposal, which is currently being discussed by the community, is targeted at compensating investors with equal tokens to the ones lost during the tax burn activation.
According to Kim, this compensation would be made from a reserve fund set aside for such situations like this—rainy days.
The 1.2% tax burn activation, which took place last year, was intended to reduce the overall supply of LUNC and increase its value.
As a regular tradition of projects, they burn a significant amount of their tokens to create scarcity and increase demand.
However, due to a technical error, some investors ended up losing a portion of their holdings.
Kim acknowledged that the mistake was on the part of the code written to execute this burn on the Columbus 5 which encountered some issues.
He has also stated that the proposal is a way to ensure that the Terra Classic community can maintain its trust in the project.
Reactions to The Proposal
Many community members expressed support for the proposal, applauding the team for taking responsibility for this occurrence.
Others, however, raised concerns about the potential impact of the compensation on the overall value of LUNC.
Some argued that this compensation of over $290 million LUNC tokens could lead to a decrease in the value of the token and reserve amount.
Kim addressed these concerns, assuring the community that the reserve fund would be replenished over time through various means such as staking and liquidity provision.
He also stated that accounts that incurred losses less than 10 LUNC token may not be reimbursed with the tokens.
The Terra Classic team is seen as taking a responsible and transparent approach towards handling the situation and is being praised for the same by the community.
The proposal is currently under discussion, and it is expected that a final decision will be made soon.
Further information on this proposal will be rolled out in due course to the public.
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