KNINE Tax Structure Adjustment Proposal

General
1

(1) Introduction and Objective

The K9 Finance community has highlighted the need to adjust the tax structure to encourage activity on the Shibarium network. Currently, K9 Finance operates on Ethereum with specific token taxes. This proposal aims to modify the existing tax structure on Ethereum and introduce a new tax structure for Shibarium. The objective is to incentivize users to bridge to Shibarium by implementing a more favorable tax regime, thereby driving activity to Shibarium and aligning with K9 Finance DAO’s goals of ecosystem growth and engagement.

(2) Benefits to K9 Finance Community

This proposal offers several advantages to the K9 Finance community:

Increased Activity on Shibarium: By offering lower taxes on Shibarium, users are incentivized to bridge their assets, increasing overall activity on the Shibarium network.

Fee Generation: The new tax structure will continue to generate fees for the DAO through fees on both Ethereum and Shibarium.

Technological Advancement: The proposal aligns with our mission to innovate within the DeFi space by leveraging Shibarium’s capabilities, reinforcing our position as a leader in the ecosystem.

(3) Proposal Details

(a) WHAT

K9 Finance management council proposes the following changes to the tax structure:

Ethereum:

Increase the Sell Tax from 3% up to 4.9%.

Keep the Buy Tax at 0%.

Shibarium:

Set the Buy Tax at 0%.

Set the Sell Tax at 3%.

This differential in sell taxes between Ethereum and Shibarium is designed to motivate users to bridge their assets to Shibarium for more favorable trading conditions.

The management council has also noticed an uptick of arbitrageurs on the ETH network and believe that a slight increase in the sell tax could disincentivize this activity or promote more network activity on Shibarium.

*NOTE - Management council will be setting the Shibarium tax structure per the existing tax regime outlined in the litepaper, on the launch of Shibarium. The difference in the tax structure is that Shibarium taxes are taken in $BONE.

**NOTE - 4.9% was identified as the target value because it’s under the 5% tagged threshold on dextools for ‘high taxes’.

***NOTE that this vote will also give the Management Council discretionary access to use the taxes from the token pools as part of the monthly operating budget

(b) WHO

The stakeholders impacted by this proposal include:

K9 Finance DAO Members: All KNINE holders will be impacted by the changes in trading taxes.

Development Team: K9 Finance development team will be responsible for implementing and maintaining the new tax structure.

Management Council: Overseeing the implementation and ensuring alignment with DAO goals.

Shibarium Users: All existing users of Shibarium could benefit from an increase in activity on Shibarium.

(c) WHERE

The implementation will occur across multiple platforms:

Ethereum: Adjustments to the current tax structure.

Shibarium: Implementation of the new tax structure to encourage activity on the layer-2 network.

(d) WHEN

The proposed timeline for the project is as follows:

Approval: Next Roundtable meeting.

Development Start: Within one week of approval.

Implementation: Targeted to coincide with the launch on Shibarium.

(e) HOW

The resources required for this proposal include:

Funding: No additional funding required beyond operational costs.

Technical Support: Engagement of a skilled developer from K9 Finance DAO to implement the tax changes.

Community Involvement: Feedback and participation in discussions to ensure the tax structure meets community expectations.

(4) Impact Assessment

The potential impact of this proposal on the K9 Finance DAO ecosystem is significant:

Short-Term: Increased user engagement and trading activity on Shibarium, leading to potentially higher transaction volumes and potential fee revenues.

Long-Term: Establishing K9 Finance DAO as a leader in DeFi tools on the Shibarium network, attempting to attract more users and developers to our ecosystem.

Risks and Uncertainties: Potential challenges in user adoption of the new tax structure, which will be mitigated through rigorous marketing and community engagement.

In the last 30 days, K9 Finance DAO has analyzed sell data on the Ethereum network. On average, there are approximately $50,000 of sell orders on the dex per day. Implementing a 1.9% higher tax rate on Ethereum could contribute to the DAO earning an additional $25,000+ in KNINE taxes per month. There are other variables that go into this estimate and one of them is the number of $KNINE participants who bridge to Shibarium to use DEXes that support the Shibarium tax structure. While Ethereum taxes will be earned in $KNINE, Shibarium taxes will be earned in $BONE, providing the benefit of earning the DAO more $BONE to leverage in the K9 Finance ecosystem for additional liquidity, delegation to the validators, and liquid staking use.

K9 Finance DAO is excited to be going live on Shibarium and wants to align the product to incentivize Shibarium adoption. The management council believes having a 1.9% lower sell tax on Shibarium could help contribute to this adoption.

16 Likes
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Reserving for top comment

5 Likes
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I’m all for sell taxes to lower the number of miniscule trades and to hinder arbitrage profits.

It makes sense to lower the sell tax on Shibarium to drive adoption. Since we’re going to only be on ShibaSwap on Shibarium, there shouldn’t be much arbitraging happening in the short term. Once CEXes that support Shibarium are added, we’ll see an uptick then.

Taxes are GOOD for the project as they help bring in money to help fund all of our budgetting proposals. If you’re here to trade KNINE, you’re doing it wrong. Buy and hold. Don’t let the word TAX make you uncomfortable.

I’ll be supporting this if/when it comes to a vote. If 4.9% is the highest we can go without being flagged, I’m good with it. 4.5% has a better ring to it, but since we lowered our taxes so quickly after launch, it would be nice to collect more funds with a higher tax to “catch” back up to what we could have been working with for the last few months.

8 Likes
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Great idea seems like a no brainer. Taxes yet annoying in our everyday lives are important. If it helps K9 and Shibarium to extend our growth, I’m all for it.

6 Likes
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I have to admit, it’s a well thought out proposal and it makes sense to me. My vote is a resounding YES.

8 Likes
6

Great proposal…I piggy back on Couch
Adventures comments…We need to make sure that it’s publicized and well known the advantages of using Shibarium…

5 Likes
7

Excellent suggestion. Support

5 Likes
8

Maybe even 2.5% on Shibarium
We could say we lowered the sale tax for Shibarium users

4 Likes
9

Does anyone have more votes this time than last?

4 Likes
10

Considering shibarium has low gas fee so that low sell tax. Nice

3 Likes
11

So my vote is yes. :100:

3 Likes
12

Having K9 ‘hat’ on I was thinking - what is the benefit for K9 Finance to take active steps (which cost DAO resources) to grow the adoption of Shibarium instead of simply relying on Shib Team efforts and not incurring any costs.

The answer is quite simple:

Being the future LSD platform of Shibarium - we must ensure that our knBone actually has demand and uses on the blockchain we operate on.

For this we need to take active steps to support the blockchain and foster growth of projects on Shibarium through grass-roots initiatives like the hackathon proposal that is running in parallel now as well as creating a favourable tax environment and facilitating partnerships with Shibarium projects which will become the users of knBone - all of which the K9 DAO is doing continuously already.

Having demand for knBone will ensure that our Validator has healthy amount of Bone delegated to it - generating Validation rewards for the DAO and propping up the value of KNINE token itself.

I won’t repeat other points about taxes which have already been raised other than saying that I concur.

Thus, I support this tax proposal and recommend K9 members to vote in favour if it passes the Roundtable of Dogs and gets to the Snapshot vote.

Blessings.

Truly Yours,
No One

7 Likes
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Agree with Frank - if we are looking to incentivise more adoption on Shibarium, I think having a 2.5% sell tax would look psychologically more attractive for users; especially against Ethereum if it goes up to a 4.9% sell tax, which would be almost double of Shibarium. As for the overall proposal, I’m fully in support of this :wink:

3 Likes
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:+1:

:+1:

I’d say not a risk, more like filtering out the investors that are not good for the K9 startup, they can go back to trade day fly meme’s XD

Else I like the others reply here, and they are much of my own thoughts about this:)

So~ all in all I 100% support this!

6 Likes
15

Not a big fan of taxes. We have all seen me say that before. I do like the idea of encouraging people to use Shibarium. I like to see the shibarium tax lower.

I also would like to see more information on buying options for purchase on shibarium. I believe this maybe an area that has been lacking exposure.

4 Likes
16

I concur with the sales tax to be higher than the current setting.

3 Likes
17

Since the tax structure is back for discussion can we implement a .5 % or 1% burn fee from the increase 1.9% on ETH?

Also, whats is the average sell % on Shibarium? In my opinion I believe it could be lower since Shibarium is supposed to be lower im transaction fees.

Overall I support this proposal

3 Likes
18

Excellent proposal.
Could not have composed it better myself.

4 Likes
19

Sounds good to me! There will be always modifications to this as time goes on.

2 Likes
20

I agree with the proposed change.

Raising the tax rate on Ethereum by 1.9% would generate over $25,000 more per month in KNINE tax revenue, which could be used for various purposes such as development and marketing. Therefore, I think the tax increase is a great idea.

5 Likes