The tax cap for luna transactions is 1 Luna. While all of the stable coins tax caps work out to about 1 SDR or $1.4. However, Luna is now $11 in price so its tax cap is $11 (or whatever the price that luna is).
A year ago, Luna was $0.35 cent; this tax cap was reasonable. But now that Luna is $10+, it is inconsistent with the other native tokens. As the price of Luna increases, this tax will become more unreasonable. The tax cap should be set at 1 SDR similar to the other native tokens.
Here are some FCD calls to check the tax caps for yourselves. Just note that the values are in uUST or uKRT or uLUNA (micro-units). Just divide by 1,000,000 to get the units in UST or KRT or LUNA.
Tax Cap for Luna:
Tax Caps for all of the stablecoins:
Below is an example of transactions from the UST-LUNA terraswap pool. The user swapped from UST to Luna. You can see that they paid a 1 Luna tax on this in the “from_contract” results. Since this was a larger transaction (1340 luna), they paid a smaller tax on this. The tax paid was 0.07%.
On a smaller transaction (89), the amount of tax that is paid is much higher since the user does not hit the cap. This user paid the full 0.5% tax rate.
Unless there is a reason I am missing that the tax should be higher on luna, I suggest placing the max tax on luna to also be 1 SDT so that it is consistent with other denoms. This would benefit those on the network that do not operate with large amounts of Luna to hit the current tax_cap.
Here are some Pros/Cons for reducing the Luna tax cap from a hardcoded 1 Luna to dynamic 1 SDR
- Consistency with other tax policies with other native tokens
- Smaller users get to benefit from the lower tax cap, not just whales
- The tax will be a dynamic value (in terms of luna) and can scale with Luna’s price
- Less revenue to validators and stakers from tax on Luna transactions
Let me know your thoughts on this.