The LNR Tax is Now 8%

Today, in preparation for the eventual contract migration of the LNR token and Lunar platform release, we begin a systematic transition to our new tokenomics structure.

1. We are reducing tax on LNR transactions. 

The first step in this process includes a decrease of LNR taxes on decentralized exchange transactions from 12% to 8%. 

How this works from a tokenomics standpoint:

Buy, Sell, & Transfer Tax - 8%:

5.5% to development, marketing, and operations. 

2% to holders in LNR reflections

0.5% to NFT rewards pool

2. To reduce the tax, we have removed the 3% LP tax.

We have removed the 3% tax which adds to the LP from the transaction tax.

The LP tax can be useful in the very early stages of a token’s growth to help increase its liquidity to market cap ratio. 

We have reached a point where LNR’s liquidity to market cap ratio is at a very healthy level, meaning there is little reason to continue charging this tax. 

To those of you who may be confused, the LP tax does NOT cause the token price to increase. A token price increases or decreases based on the amount of buying versus selling in that pool, not when additional liquidity is added directly to the pool itself.

3. To further reduce the tax and begin our transition away from reflections, we have decreased the reflection tax to 2%.

As we’ve communicated since the beginning, the future tokenomics structure of LNR will not include reflections. 

Instead of abruptly removing reflections altogether, a gradual shift helps ensure a smooth transition to LNR’s future token economics. As a great first step, this structure helps ramp down LNR reflections, while keeping reflections at the same proportion of the total tax as before.

While the percentage of reflections have decreased, the tax reduction it provides has the potential to actually increase the amount of reflections holders receive before they're gone. In theory, when there is a lower tax on trading, people are more likely to trade, which would increase trading volume and therefore reflections. 

Questions you might have, and answers to them:

Will holders who recently purchased get a 4% refund?

We are unable to provide refunds for purchasing LNR before the tax reduction. If we were able to do so, we would provide every holder with a 4% refund. 

Even if we picked a cut-off date for refunds, the holders who bought right before that cut off date would now be in the same position, creating a cycle that only ends when every holder gets a refund. 

Why didn’t we announce when this step was coming ahead of time?

While our natural tendency is to communicate everything we can with our community, structuring the announcement this way was the most fair for all holders, and allowed everyone to avoid a scenario where buying decreases dramatically due to people waiting for a near-term reduction in taxes. 

What does this mean for slippage?

Since both the buy and sell tax have been reduced, the required slippage tolerance when buying and selling on decentralized exchanges is lower. The recommended buy and sell tax slippage is now ~11%. 

If taxes are gradually decreasing, should you wait to buy in order to take advantage of even lower taxes in the future? 

If or when you decide to buy LNR is completely up to you. We make no recommendation.

But for clarity, the buy tax will remain at 8% for a substantial period of time.

Why are we migrating contracts and how will this affect holders? 

To those of you who aren't already aware, to meet the needs of our upcoming platform and maximize LNRs utility within the ecosystem, new functionalities will be added to the LNR smart contract through a contract migration. 

Unlike many other projects, our eventual migration is designed to be super seamless for holders. 

All existing holders at the time of migration will automatically receive their new LNR tokens at an equivalent value to their existing LNR tokens. 

This means that there will be practically zero work required on your end. When the time comes, all you’ll have to do is enable the new LNR token in your wallet so you can see your holdings, which can be done at any point in time.

Why are we making it this easy? Because we care immensely about you all, and improving the crypto experience is the reason we exist.

If you have any other questions, we’d be happy to answer them. Feel free to drop in on one of our twice-weekly AMAs and ask us directly!

We hope you all are as excited as we are for what this transition can bring for the Lunar token and ecosystem. 

Buy LNR on PancakeSwap here (now with 33.3% lower taxes!)

To infinity and beyond, 

The Lunar Team

About the Author

Spaceman
Co-Founder & CEO

Spaceman is a serial founder, product designer, and user experience expert who has built multi-million dollar businesses across multiple industries including FinTech.