Remove KNINE token buy tax

General
1

(1) Introduction and Objective

Start your proposal with a brief overview of the identified problem or opportunity. Clearly state your proposal’s objective and its alignment with K9 Finance DAO’s goals. Keep it concise and direct, communicating precisely what you’re proposing.

The community has expressed that there are barriers of entry in getting involved in the KNINE token and barriers to creating a vibrant trading environment due to the current tax structure for the KNINE token as outlined in the litepaper. The goal of this proposal is to find community consensus on a long term and constant tax structure that will balance the competing objectives of fostering a good trading environment, lack of arbitrage opportunities, and treasury growth.

A bit of history about how taxes work for the KNINE token…

Example 1 ETH Purchase on Uniswap

If someone buys 1 ETH worth of KNINE, a 3% buy tax is applied where 3% of the total KNINE is taken as a tax which goes out of circulation. These KNINE tokens are sent to the K9 DAO treasury wallet. This effectively creates a decrease in circulating supply and supports the price/chart.

Similarly, if someone sells 1 ETH worth of KNINE, a 7% sell tax is applied where 7% of the total KNINE is taken as a tax which goes out of circulation. These KNINE tokens are sent to the K9 DAO treasury wallet. This effectively creates a decrease in circulating supply and supports the price/chart.

(2) Benefits to K9 Finance Community

Clearly outline the advantages that the K9 Finance community will gain, such as ecosystem growth, technological advancements, and other relevant benefits.

The benefits to this proposal include: reducing barrier to entry in purchasing KNINE tokens while maintaining a source of revenue for the DAO treasury that will promote long term growth and marketing for the K9 Finance DAO.

(3) Proposal Details

(a) WHAT: Outline the solution or strategy proposed to address the identified problem or opportunity. Explain the key features or components of the proposal.

The proposal is to eliminate all buy taxes (currently set at 3%) and to reduce the sell tax to 3% in perpetuity.

(b) WHO: Identify all stakeholders impacted by the proposal, including those who need to be involved in its implementation. This may include partners, the management council, or any other relevant parties.

This proposal will impact all token holders by eliminating taxes for buying and significantly lowering the taxes for selling. It will also impact the greater DAO by maintaining a source of sustainable revenue prior to the product launching in Q3. The management council will be able to implement this change in taxes quickly upon a consensus vote.

(c) WHERE: Specify the locations or platforms where the proposal will be implemented or have an impact. This could include specific regions, online platforms, or other relevant locations.

This proposal will only impact the current Uniswap V2 pool for KNINE tokens. It will not impact any centralized exchange operations.

(d) WHEN: Provide details on any special deadlines or timelines associated with the proposal. Outline the expected schedule for implementation, including milestones or key dates.

The implementation of a successful vote would be executed within 24 hours.

(e) HOW: Specify any resources needed, such as funding, technical support, or additional community involvement. Describe the specific steps or actions required to execute the proposal.

No funding, technical support, or community involvement is required. The DAO multisig would execute a transaction to lower the taxes on the KNINE token.

(4) Impact Assessment

Evaluate the potential impact of your proposal on the K9 Finance DAO ecosystem. Consider both short-term and long-term effects, as well as any risks or uncertainties. Include key metrics that might be relevant.

In the short term, the barrier to entry of purchasing KNINE tokens on-chain will be significantly reduced. Reducing the sell tax will make it more financially beneficial to sellers, and will reduce some operational revenue for the K9 Finance DAO.

The community is encouraged to discuss what an appropriate long term tax structure may look like, as there are pros and cons to this proposal. Everyone is invited to offer criticism and suggestions prior to this going to a vote. Based on this feedback, the management council is open to adjusting the proposal prior to going to a community vote.

12 Likes
2

I understand the benefit of a sale and buy tax… It’s my opinion that a buy tax may discourage buyers which I don’t believe is beneficial. A sale tax may discourage selling which is a positive…On cex’s it’s really irrelevant. I just want to take away any negative perception…

6 Likes
3

In regards to $KNINE buy and sell taxes, the funds accumulated through this process helps create a solid foundation for the vibrant trading environment the community seeks to build. While most traders have various trading strategies, a common trait within “top-traded assets” is locked liquidity. $KNINE’s buy & sell taxes help increase locked liquidity for $KNINE, while at the same time generating an “in-house” fund within the K9 DAO treasury wallet. Funds within the K9 DAO treasury wallet are the least likely to be compromised, therefore solidifying the liquidity & solvency of $KNINE as a token, team & ecosystem. I purpose retaining the buy & sell taxes while reducing buy takes to 1% and reducing sell taxes to <4%

6 Likes
4

I agree with Calvin. Buy 1% sell 3%

3 Likes
5

Everyone seems to be in relative agreement on the general range of the tax. My thinking has been essentially 4% round trip. 0 buy - 4 sell, 1 buy - 3 sell, etc. The 0 buy is nice for small buyers in particular, myself included, that are trying to build. My question is pros/cons/benefits to having a small buy tax vs not, in terms of financial assistance to the team as well as bot deterrent. Also, I made a comment in the TG chat about even if a 1% buy tax was implemented and straight burned. I know burning isn’t really going to do much with 1 trillion tokens but is there any cost/benefit comments to that? Many people get some excitement for projects know burning is happening.

From everything I have read, I have confidence that the final outcome will be found acceptable to most on whatever numbers get implemented.

5 Likes
6

I think it would be better to cancel the sales tax when the market value reaches 1b [or other value]?After all, market development and marketing account for 34% of the token distribution.

3 Likes
7

Eliminate buy and reduce sell tax to 3% would be fantastic, I think it would help volume as well as be more intriguing to new investors coming in!

3 Likes
8

I like the buy tax at 0 and sell tax 3-4%. Should eliminate all buy barriers and would also allow for better DCA from the smaller purchase.

2 Likes
9

K9 in its infancy is building and growing their team…

Buy 0% Sell 5% (favoring this more)

Or

Buy 1% Sell 4%

I am not a tax professional. However, there are some things to consider:

  1. Taxable or potential taxable events: bridging, providing liquidity, farming, earning rewards, lending, borrowing, wrapping tokens, and gas fees (Source: DeFi Taxes in the US - Complete Guide 2024). Airdrops are considered income and could be another taxable event on the individual.

  2. Off-Set Capital Gains Tax (CGT): Due to taxable or potential taxable events listed above. Encouraging people to hold tokens for more than 1 year, one would pay less CGT

  3. Gains and Losses: “Investors can sell an unlimited amount of assets and deduct up to $3,000 to offset ordinary income on their federal taxes” (Source: Investopedia)

  4. Estimate what you have to pay as an individual or family when it comes to crypto tax (Source: Cryptocurrency Tax Calculator – Forbes Advisor)

K9 is an infant, “The purpose of the fees is to create a revenue model for the K9 Finance DAO before the product launches and to ensure proper security and management of the issued tokens” K9 LitepaperV1

“Fees: to generate revenue for K9 Finance DAO to maintain operations for the long-term on Shibarium there must be variable revenue mechanics built into the products” K9 LitepaperV1

*Liquidity coming in business running smoothly, reduce taxes on buys/sells through DAO vote

*Selling assets to offset ordinary income is helpful, but I’m thinking ppl would like to sell less of their valuable assets, not more of it. Also thinking that the lower the tax, more of the asset would need to be sold to reach the $3000 deduction. Just a thought, I could be totally wrong here.

5 Likes
10

I do not care for this language …”the sell tax to 3% in perpetuity”… I think it should remain variable and DAO controlled. When the platform launches this will create additional revenue and could be another opportunity to reduce taxes again. I believe this could be beneficial for the DAO and show a commitment to the community, rather than locking in a 3% fee in perpetuity.

3 Likes
11

Would daily transaction volume be a more reliable metric to use versus using market cap?

Edit.
Thought I was replying to ll420’s comment.

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THE BARRIER

In the $KNINE community there are those who believe there is a barrier to access the $KNINE token and it results in a lack of fluidity in the trading environment. The barrier is believed to be the tax structure listed in the litepaper.

THE NEW STRUCTURE

I believe that getting into $KNINE should be easy for everyone to get into and even though 3% tax isn’t too hefty, I believe that our token is tempered more towards the idea of our community base being holders. With that being said, entry tax being 1% wouldn’t be much of a takeaway from our community.

The 7% sales tax on exiting, although i believe is completely fair i would vouch to keep it the same, but 5% is more of a psychologically appealing and welcoming point of taxation. I’d even vouch that most individuals don’t see the long term vision of our service, but as adepts and wanting the best for our community members 5% should suffice.

A SOLUTION

Understanding that we will be using the taxes for the purpose of removing tokens out of circulation, I believe that instead of just simply removing tokens from circulation, they should be permanently staked in a staking pool separate from the public staking pools.

The next steps that should be taken is either to allocate staking rewards from those pools, and have those rewards divvied to $KNINE holders who are holding in personal wallets including the treasury wallet. The $KnBone proceeds from the burn wallet can be utilized as lending options, left unutilized, sent to a burn address or staked in another DeFi project like, Bad Idea A.I. pools Etc. Whichever option counts towards the removal of circulation and is most beneficial.

BENEFITS

  • Perpetual staking rewards for holders whether they are staking personally or not.
  • Burned(∞ staked) tokens are still generating profit for holders.
  • Increase the chance investors will move from exchanges to personal wallets to receive staking rewards.

SUMMARY

  • Reduce Buy Tax to 1%
  • Reduce Sell Tax to 5%
  • Stake Tax Proceeds indefinitely (Removing them from circulation)
  • Divide Staking Rewards amongst personal Wallets
  • Excess KnBone burned away, used as a lending option, or (∞ staked in another DeFi Pool) Gifting those rewards to charity.

Final Note:

The staking rewards from the tax proceeds should be divided up equally between every holder with a personal wallet along with the treasury wallet regardless of account history or finances. This is important because our community is not tempered to make the rich richer only, but to raise up every man and woman with an eye to see, and an ear to hear our message.

These rewards may not be the main source of financial freedom but it can be the difference for someone at the edge of breakthrough.

I would also vouch to create a separate wallet that will receive from these staking rewards purposed for charity. It is important that we give back, giving is what makes us great.

9 Likes
13

Truthfully, the fee structure has served its purpose well up to this point. It appears that many who have raised concerns may not be fully aware of the rationale behind the fees, as described in our litepaper: they are there to establish a solid financial foundation for the K9 Treasury to manage the DAO and to ensure the tokens’ security and governance. I personally believe the fee schedule is well-calibrated, particularly as we’re heading into week 5 with a planned reduction in fees.

Nevertheless, given that we’ve accumulated a significant amount in our Treasury thus far, we might not require fees as high as initially projected. Adjusting our approach to a 1% buy tax and a 3% sell tax could be a strategic move to reduce complaints and possibly invigorate trading volumes, without compromising the financial health or objectives of the DAO.

13 Likes
14

I agree with this as well. Buzz did say that if we completely remove the buy tax the project will have some sort of ramifications.

4 Likes
15

I agree the well thought out structure to the tax speaks to the longevity and strength of the project. But to means, if it was lowered to buy 1% and sale 5% to be lowered 1% per quarter would be best.

2 Likes
16

The mission of K9 Finance on Shibarium is to grow DeFi. I believe as a DAO the only source of funds is the community. We need a healthy treasury to fund products like fiat on-ramp, borrowing and lending platforms etc. As such a healthy tax regime is essential.

However, considering the demographics of the SHIBARMY, we have to consider those from less wealthy backgrounds participating in the DAO. A high tax regime on entry could be considered a barrier to entry, at the same time a high tax regime on exit could be argued as limiting financial freedom.

There is of course a sweet spot, where we can cushion the effect of a high sell tax by having either 0 or 1% buy tax. DAO members can opt to stake $KNINE and earn $BONE and other Shibarium projects that choose to participate and use those rewards as an exit strategy.

Therefore I support the proposal for a 0% buy tax and 3% sell tax.

Thank you.

7 Likes
17

I agree. This wording should be improved. With this proposal, the fee still remains a changeable variable that the DAO controls. The language therein could be clarified to state that the fee is proposed to be 3% until changed again through a vote.

8 Likes
18

I think investors that took the time to read the litepaper and see all of the marketing involving the tax structure understand the importance of the taxes. Obviously, they also agreed to these terms since they invested.

People looking for the “Hot new project” to try and make a quick buck shouldn’t count towards an opinion. They can’t vote because they don’t hold KNINE.

This project isn’t a charity, if they don’t like taxes, there are plenty of other projects out there struggling to build marketing presence, liquidity, and trust with the community. K9 is not a charity.

There is already a laid out road map for reducing taxes. If taxes are a barrier for some, then they probably don’t need to be involved at this time to begin with. If they can’t support the project they are investing in because they think taxes are unfair, again there are plenty of other crypto choices to make.

My opinion is to keep the original tax roadmap. The lower taxes will be here with time and time never stops.

5 Likes
19

@ turtle

RESPONSE:

(3a; Sub. a1) Eliminate Buy Tax
Eliminating the Buy Tax would stunt the growth of the K9 DOA Treasury, additional aspects of the project and expansion of the DeFi environment at this stage of the K9 project(s).

I acknowledge that the Buy Tax could be lowered to 1%, but not lower than 0.5%. The K9 DOA Treasury would still grow; be it at a predicted slower rate.

(3a; Sub. a2) Sale Tax Reduction
Reduction of the Sale Tax would help any seller of K9 Tokens with their profits. While reducing the growth of the K9 DOA Treasury could cause delays in operational/project aspects.

(3a; NOTE)
The K9 Finance Litepaper V1 (Page 14; Token Fee chart):
The $KNINE token fee is variable and the DAO maintains control to change the fee through a registered vote. The original fee structure, upon launch, will be as presented in the Token Fee chart with day 0 being the date of the TGE.

(3e) HOW:
Findings show that the community/DOA are required to be involved.

  • The community/DOA needs to participate in the vote.
  • The implementation of the voting results.

(4) IMPACT ASSESSMENT

  • The community’s barrier to the purchase of K9 Tokens would be reduced by the reduction of the Buy Tax.
  • Reduction of the Sell Tax would be financially beneficial to sellers.
  • The reduction of both the Buy Tax and/or Sale Tax will reduce operational revenue of the K9 DAO Treasury.

NOTES:

  • The reduction of Taxes (i.e.: K9 Token Fees; K9 Finance Litepaper V1) would benefit the community in the purchase & sale of K9 Tokens.
  • Another barrier to the smaller purchaser & seller is the ETH Transaction Fee. Even after the latest Ethereum Upgrade, the ETH Transaction Fee can be a hindrance.
6 Likes
20

I like to logic of .5% buy tax

Currently believe there is a logic to high sale tax during the fist 3 quarters. Logic in high sales tax is to reduce the manipulation of price through buying and selling.

3 Likes