Juno was built as a 100% community driven initiative Without any VCs funds backing it that means it has to rely on the community pool for funding the Development on the network. Currently only 2% of the inflation is going towards the community Pool, which is a very negligible amount.

In order to continue funding development and have a Sustainable Ecosystem Juno requires a strong treasury/community Pool. This proposal requests to Increase the current community tax from 2% to 10% until at least the next halving which will result in the following benefits:

• Reduction of some part of the daily sell pressure on the Juno token because the inflation going towards stakers will decrease by 8%. The apr of staking Juno would fall from 39.91% to roughly around ~36.66%.

• The community pool would increase roughly by ~1.5million Juno (instead of ~300k Juno with the current tax) till the next halving.If this becomes a permanent change then the community pool would increase by ~9.2 million Juno in total (instead of ~1.8 million Juno with the current tax) till the end of the Juno’s 12 year inflation period.

• A stronger Community Pool will enable Juno community to conduct L1 to L1 swaps Which will enable Juno to have a diversified treasury.

• With a Larger community pool we will be able to use Juno tokens to have protocol owned Liquidity which will remove the need for Providing inflationary external incentives , which also affects the token price in a negative way, for Deep liquidity in Juno Pools. Some good resources explaining how protocol owned liquidity works: Why Web3 Projects Should Move to Protocol-Owned Liquidity - by dapp radar What is Protocol owned liquidity? A Primer on the model developed by Olympus DAO

Drawback of not increasing community tax

If Juno community pool doesn’t have any funds flowing into it right now it might end up in similar position like Cosmos hub in a few years ,where only $13 million out of the $3.2 billion chain valuation sit in the community pool which is around 0.4% of the current total supply. Even the Cosmos hub community has proposed to increase the community tax to 10% to increase the communtiy pool funds.

vote

By voting YES, you agree to increase the community tax.

By Voting NO, you don’t want the proposed change to the community tax to be implemented.

By voting ABSTAIN, you formally decline to vote either for or against the proposal.

By voting NOWITHVETO, you express that you would like to see depositors penalised by revocation of their proposal deposit, and contributes towards an automatic 1/3 veto threshold