The proposal that will allow the incineration of the whole community’s Oracle Pool, which amounts to hundreds of billions of LUNC tokens was released although it has gotten the minimum deposit required for voting.
Notably, the community pool is a place where the Terra Classic community gets funds to bankroll projects and development efforts to advance the network.
Terra Classic is a blockchain platform that is designed to enable decentralized finance (DeFi) applications. The platform is based on the Tendermint consensus algorithm and is designed to be highly scalable, secure, and efficient.
One of the key features of Terra Classic is its community pool, which is a reserve of Terra Classic tokens that can be used to fund development projects and other initiatives within the Terra Classic ecosystem. The community pool is funded through a portion of the transaction fees generated on the Terra Classic network.
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Recently, a proposal was submitted to burn the Terra Classic community pool. The proposal argues that burning the community pool would increase the scarcity of Terra Classic tokens and create a more valuable asset for holders.
Terra Classic To Burns Its Community pool
Proposal 11398 comes with a simple message: “burn community pool. caused nothing but stress to burn the sh-t.” The proposal was submitted seven days ago, with an initial deposit of 255,415 Terra Classic (LUNC). So far, deposits have increased to 299,500 LUNC, but still, a long way to the minimum required deposit of 1 million tokens.
Burning the community pool would involve permanently removing the tokens from circulation, effectively reducing the total supply of Terra Classic tokens. This would make the remaining tokens more valuable, as there would be fewer of them available for purchase. The Terra Classic community pool now has 235 billion LUNC, representing 3.4% of the asset’s total supply.
While the proposal to burn the Terra Classic community pool has sparked some debate within the Terra Classic community, there are several potential benefits to this approach. One of the main advantages of burning the community pool is that it would increase the value of Terra Classic tokens for existing holders. This could incentivize more users to hold onto their Terra Classic tokens, rather than selling them on the open market.
The challenge of burning the community pool
Burning the community pool could also increase the overall value of the Terra Classic ecosystem. If Terra Classic tokens become more valuable, it could attract more developers and investors to the platform, which could lead to increased innovation and growth.
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However, there are also some potential drawbacks to burning the community pool. One concern is that burning the tokens could limit the funding available for development projects and other initiatives within the Terra Classic ecosystem. If the community pool is burned, there would be fewer tokens available to fund these initiatives.
Another concern is that burning the community pool could be seen as a risky move. While reducing the total supply of Terra Classic tokens could make them more valuable, it could also lead to increased volatility in the market. If there are fewer tokens available for purchase, the price of Terra Classic tokens could become more volatile, which could be a concern for investors.
Overall, the proposal to burn the Terra Classic community pool is an interesting one that could have significant implications for the future of the platform. While there are potential benefits to this approach, there are also some potential drawbacks that need to be carefully considered.