How LUNC governance works: proposals, votes and the community pool

LUNC governance is the on-chain voting system that runs Terra Classic. Anyone can submit a proposal with a deposit, staked LUNC votes on it for seven days, and if it passes, the result is binding: parameters change, community money moves or a software upgrade is scheduled. There is no company that can overrule the vote.

That makes governance the single most important thing to understand about LUNC. The burn tax, validator fee floors, the deposit size and the code upgrades all came from numbered proposals. The live feed in the hero shows the proposals open for voting; this guide explains how to read it and how to take part.

Who decides on Terra Classic

Votes are weighted by staked LUNC. Coins sitting in an exchange account or an unstaked wallet have no say. Validators vote with all the LUNC delegated to them unless the delegators vote themselves. Since Terraform Labs walked away in 2022, this has been the only way decisions get made; our community guide covers the people involved.

Proposals come in a few practical types. Text or signal proposals only express an opinion and change nothing on their own. Parameter changes adjust a live setting, such as the tax rate or the validator fee floor. Community-pool spends pay a team or project from the on-chain treasury. Software upgrades set a block height at which every validator must switch to a new core version, which our upgrades page tracks.

Proposal numbers are global and have passed 12,200. Many old numbers were spam or never reached their deposit, which is why the sequence has gaps.

The rules: deposit, quorum, threshold and veto

The voting rules are themselves on-chain parameters, so they can change by governance vote. The values below are the live settings read from the chain.

Two details trip people up. First, quorum is measured against all staked LUNC, not total supply. With roughly 900 billion LUNC staked, about 360 billion has to vote before any result counts. Second, Abstain helps reach quorum but is left out of the Yes share. Veto works differently again: NoWithVeto is measured against all votes cast, including Abstain.

The 5 million LUNC deposit exists for a reason. Terra Classic has seen plenty of spam proposals, and a cheap deposit made them easy to post. Proposal 11780 raised the minimum in September 2023, and proposal 12071 added the 20% upfront requirement in February 2024. Combined with the deposit burn on veto, a joke proposal now costs real money.

Worked example: how proposal 12223 passed

Proposal 12223 raised the burn tax from 0.5% to 1.5% and ended on 2 August 2026. Its final on-chain tally was about 231.9 billion Yes, 90.3 billion No, 118.3 billion NoWithVeto and 274.8 billion Abstain, for roughly 715 billion LUNC voting. That cleared the 40% quorum.

For the threshold, Abstain is set aside. Yes divided by Yes plus No plus NoWithVeto is 231.9 out of about 440.5 billion, or 52.6%. That is above 50%, so it passed. For the veto test, NoWithVeto is divided by all votes cast: 118.3 out of 715 billion is about 16.5%, well below 33.4%. Some news sites reported that 12223 passed with 96% support. The chain shows a much narrower result, and an abstain share of 38.4%. The new split is explained on our burn tax page.

How to vote with Galaxy Station

Galaxy Station, built by Hexxagon, is the wallet most Terra Classic voters use. It runs as a Chrome or Brave extension and as a web dashboard, and it supports Ledger. Keplr can stake LUNC but votes only through third-party sites. Our wallet guide compares the options.

1. Install Galaxy Station

   Add the extension in Chrome or Brave, create a wallet or import a 24-word Station seed, and select Terra Classic. Write the seed on paper and never type it into a website.

2. Get LUNC into the wallet

   Withdraw native LUNC to your terra1 address from an exchange. Keep a small extra amount for gas fees.

3. Stake with a validator

   Open Stake, choose a validator and delegate. Only staked LUNC votes. Unstaking later takes 21 days, so stake only what you can lock.

4. Open the proposal

   Find the proposal in the governance section or on a finder, read the full text and the forum link in its metadata, and check that it is in its voting period.

5. Vote and sign

   Choose Yes, No, NoWithVeto or Abstain, confirm, and sign the transaction. Your vote then shows on explorers within a block or two.

Staking first is the step people skip. If you want to vote but are not sure who to delegate to, read our validator guide and the staking guide: the yield is modest, at around 2% a year net, but the vote is the real benefit for many holders.

No LUNC to stake yet?

Buy USDT with a card, send it to an exchange that lists LUNC, buy there and withdraw to Galaxy Station. Check that the exchange’s LUNC withdrawals are open before you buy.

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Your validator votes for you, unless you vote

On Terra Classic, as on other Cosmos chains, a validator’s vote is applied to all the LUNC delegated to it. If you vote yourself, your vote replaces the validator’s for your share. You can do this on any proposal, with any amount of stake. Most delegators never do, which gives large validators a big say.

The concentration is real. About six validators together hold more than a third of staked LUNC, enough to sink a proposal through NoWithVeto if they agree. That is why voting records matter when you pick a validator. Explorers show how each validator voted on past proposals; check the ones that touched tax or spending before you delegate.

A practical tip: if your validator often abstains or votes against your views, you can redelegate instantly to another one. The new pair then has a 21-day cooldown before you can move that stake again.

The community pool: what is in it and how it fills

The community pool is Terra Classic’s treasury. It holds roughly nine billion LUNC and tens of millions of USTC, plus small balances of other denoms. Two streams refill it: 0.15 points of every 1.5% burn tax since proposal 12223, and half of all gas fees through the 50% community tax. The live balances are on our supply page.

Nobody holds a key to the pool. Money leaves only when a community-pool spend proposal passes, and the recipient address is written into the proposal. Recent spends funded IBC relaying, two phases of the Cosmos SDK 0.53 upgrade and a Hyperlane bridge to Ethereum, BNB Chain and Solana. The Hyperlane budget was paid only after delivery, which is a model worth copying.

Voters can also refuse. In August 2026, proposal 12224 tried to cap the pool’s reserves and send any surplus to the oracle pool; it was rejected. In October 2026, a paid security audit (12228) was rejected with a NoWithVeto share above 42%.

The proposals that shaped Terra Classic

These are the votes people search for by number. Results come from each proposal’s final on-chain tally.

Three lessons stand out. Signals are not code: 3568 got 99.5% support, but nothing changed until 4159 approved distribution of working code and 4661 set the 1.2% parameter, which went live at block 9,475,200 around 21 September 2022. Votes get reversed: the 1.2% tax lasted less than a month before 5234 cut it, and 10983 was repealed by 11111 within weeks. And numbers get misquoted online: 11111 did not set the 0.2% rate, and 1.5% was rejected twice, in 11933 (December 2023) and 12149 (December 2024), before 12223 succeeded. Proposal 12234 matters for builders, because contract code now needs governance approval or an allow-list. A follow-up proposal, 12236, asked governance to let two specific teams, Juris Protocol and LuncSwap.fun, upload code under that rule; the effect on apps is covered on our dApps page.

How to read and evaluate a proposal

Start with the type. A text proposal is a poll, so judge whether it has a realistic follow-up plan. A parameter change does exactly what its message says, so read the message: the title “lower fees” and a parameter value of 0 are not the same thing. A spending proposal needs a recipient, an amount and ideally milestones. An upgrade proposal needs a released, tagged version on github.com/classic-terra and a block height.

Then follow the discussion. Most recent proposals link a thread on the LuncGoblins Discourse, where drafts are debated before the deposit is posted. You can read the full text and live tally on Galaxy Finder. The old Agora forum is an archive from the TFL era.

Finally, ask four questions. Who gets paid, and when? Does payment depend on delivery, as with the Hyperlane grant? Is the team known, given that proposal 12033 made KYC compulsory for funded L1 developers? And what happens if it fails? NoWithVeto is meant for spam and harmful proposals, not for ideas you simply dislike. Plain No is the right vote there.

Read, then vote