Published in · 7 min read · Dec 11, 2023
Understanding Terra Luna Classic (LUNC): A Detailed Overview
Terra Luna Classic (LUNC) is a proprietary cryptocurrency born out of the erstwhile chain, which has since evolved into Terra Classic. This digital coin found its inception on May 28, 2022, positioned as a critical milestone in the development of the new chain consequent to a well-orchestrated fork.
Previously recognized as LUNA, the controlling mechanism that once fortified the stability of Terra Classic’s indigenous stablecoin, TerraClassicUSD (USTC), is currently inoperable. This is primarily attributed to the shutdown of all the associated mint and burn operations.
Circulation and Market Capitalization of LUNC
Fast-forward to December 2023, the circulation of LUNC registers an impressive figure close to 5.8 trillion. This colossal number contributes to its noteworthy market capital that stands at around $1.07 billion. As per the last update on December 11, 2023, the going rate of the Terra Luna Classic token revolves around a value of $0.00018.
This scrutiny into Terra Luna Classic aims to shed light on the intricate details of this digital asset and its place in the thriving world of cryptocurrency. It brings to the surface the nuanced modifications it underwent and highlights its market influence, underlining its significance in the blockchain landscape.
Understanding the Two Variants: LUNA vs LUNC
The advent of the original Terra blockchain took place in January 2018, courtesy of its creators, Do Kwon and Daniel Shin. Notably, it was the inception of an initial coin offering (ICO) for LUNA that publicly launched it in early 2019. The crypto sailed smoothly for several years, positioning itself as one of the top 10 globally recognized cryptocurrencies in terms of market capitalization.
However, a significant setback emerged in early May 2022 when TerraUSD (UST), a paired stablecoin, dramatically depreciated against the USD. This unexpected downturn didn’t just affect Luna but spiraled into a global crypto market meltdown, marking the beginning of an extended cryptocurrency winter.
Rebirth of the Blockchain: The Emergence of a Second Chain
As a response to this adversity, Do Kwon crafted a blueprint for blockchain survival which included a substantial system overhaul — a hard fork that would result in splitting the Terra chain into two independent chains. Notably, the new chain was to operate without any stablecoin. The proposed recovery plan gained approval from Terra validators on May 25, 2022, culminating in the birth of Terra 2.0 only three days later.
The Native Tokens: LUNC and LUNA
The native token of the Terra 2.0 blockchain goes by the name of LUNA. Concurrently, the original Terra blockchain underwent a rebranding exercise, subsequently known as Terra Classic. Accompanying this change was the renaming of its native token to Luna Classic (LUNC). These tokens — LUNA and LUNC, function as the primary staking tokens for their corresponding chains, giving stakeholders a hefty say in governance.
The distinction between LUNC and LUNA primarily lies in LUNC’s burn mechanism. An initial supply of a staggering 7 trillion was substantially reduced due to this mechanism, bringing its current supply to a slightly lower 6.82 trillion. No doubt, this token burn mechanism has a significant role in this reduction.
A Closer Look at LUNC and LUNA
The Emergence of the Luna Hard Fork
In the wake of the significant disruption experienced by the entire Terra ecosystem, Do Kwon introduced the idea of a hard fork as a solution to rejuvenate the Terra network. A hard fork happens when the original blockchain branches into two new chains, with both retaining value while discontinuing mutual interaction.
The Genesis of Terra Classic
The Terra ecosystem’s hard fork was named ‘Terra Classic’, echoing the creation of Ethereum Classic after the 2016 Ethereum DAO hack. The splitting of Ethereum resulted in the birth of two distinct chains, mirroring the transformation occurring within the Terra ecosystem.
The Evolution to Terra 2.0
The new Terra blockchain version, dubbed Terra 2.0, implemented a significant change by not incorporating algorithmic stablecoins within its ecosystem. The holders of the redesigned LUNA tokens, known as Luna Classic, were those who held, staked, and developed apps on the Terra Luna Classic, alongside the residual UST holders.
The Prospects of Luna Classic
Initial Downturn and Subsequent Revival
The Luna Classic price experienced a period of stagnation at $0.0001 for several months following the rebranding — a natural outcome considering the prevailing crypto market conditions. However, Luna Classic observed a brief rally following the approval and implementation of a tax burn proposal on September 21, 2022. This tax policy burned 1.2% of every transaction on the blockchain, subsequently reducing the supply of Luna Classic and spurring demand.
Impact of Binance’s Announcement
A deeper rally was triggered on September 26, 2022, when Binance announced it would burn all trading fees related to Luna Classic spot and margin trading pairs. This led to a massive 60% price surge within a mere few hours — from $0.00018 to $0.0003.
Alas, the price surge was short-lived, and Luna Classic’s value started a steady descent, reaching a support level of $0.0005 by August 2023. Despite this, the price surged once again from $0.0000778 on November 26 to $0.00027 on December 5 but slightly declined to $0.00018 by December 11.
Future Outlook of Luna Classic
This tumultuous rollercoaster has nevertheless led crypto experts to maintain an optimistic perspective on Luna Classic’s future. Based on the predictions from DigitalCoinPrice, it’s expected Luna Classic’s price to creep up to around $0.00067 by the year 2025 and rocket to $0.0019 by 2039. AMB CRYPTO shares a similar sentiment, projecting Luna Classic’s price to rise to $0.00046 by 2025 and reach $0.001 by 2030.
Factors Driving Up the Value of Luna Classic
Several factors have combined in contributing to the recent upward trend in Luna Classic’s (LUNC) value. The key events trace back to late September 2023, when the Terra Classic community made significant decisions that had a broad impact on the cryptocurrency’s trajectory.
Terra Classic Community’s Decisions and Impact on LUNC
In a decisive move, the Terra Classic community voted to call off the minting of USTC. Concurrently, they passed a proposal to heighten the support of Binance’s incineration of USTC. These actions aimed at intensifying the already substantial total of 43 billion LUNC incinerated through Binance’s existing monthly mechanism.
Mint Cash’s Intervention
Shortly after, in the dawn of October 2023, Mint Cash, a potent payment and savings platform backed by Bitcoin, disclosed plans intended to rejuvenate the Terra ecosystem. Their proposed strategy involved implementing a USTC airdrop scheme to provide relief to individuals impacted by the financial crisis that had arisen from the LUNA/UST market crash.
Terraform Labs’ Role in Boosting Terra Ecosystem’s Liquidity
On November 22, a significant event unfolded as Terraform Labs announced its injection of a staggering $15 million into two projects falling within the Terra ecosystem’s domain. This massive investment aims to amplify the liquidity of elite assets such as Bitcoin and Ether. Additionally, this boost would pave the way for the construction of DeFi applications.
However, amidst these seemingly promising events which catalyzed the spike in LUNC’s value, there are few signs for complete recovery and full return to its previous status. Presently, LUNC appears to be witnessing a downfall in its price once again, in part due to a recently proposed idea to diminish the count of validators on the Terra Classic chain from 135 to 100.
Criticism Surrounding the Reduction of Validators
This particular proposal, approved by the community, has faced widespread criticism due to the possible risks associated with increased centralization, which could harm security and stifle growth.
The Entry of CoinUnited.io
In the midst of these events, CoinUnited.io decided to step in to bolster the revival strategy by enabling holders to trade and exchange LUNC. At this platform, traders can buy LUNC as a USDT spot pair or a USDC spot pair. Moreover, Luna Classic can be purchased as a USDT perpetual on CoinUnited.io.
Terra Classic’s Future: A Speculative Odyssey
Without question, the occurrence in May 2022 where Terra’s original blockchain experienced a seismic disruption gave many investors and cryptocurrency aficionados cause for concern. The initial creator, Do Kwon, faced heavy scrutiny with allegations of fraud, generating widespread skepticism about the possibility of Terra making a triumphant return. Yet, against all odds, the early signs of resilience are sprouting from the Terra Classic blockchain. The recent convergence of events has precipitated an upward trend in its price.
Nevertheless, the influence the community wields over the Terra’s direction is considerable. Even a minor shift could instigate a ripple effect, causing significant shifts in its prices as evidenced by the latest validator proposal. It suggests that the ongoing struggle within the Terra Classic community is deeply rooted in tackling uncertainties and challenges.
Consequently, drawing concrete predictions about whether LUNC, the crypto token of Terra Classic, will successfully resurrect or yield to a wrecking fall remains a daunting task for even the most seasoned observers.
The Need for Prudence and Watchfulness
However, recent developments have shed light on the inherent tenacity of Terra Classic. The echoes of past hurdles combined with the volatile nature of market sentiments call for continued prudence and alertness. To that end, strong tags around “prudence” and “alertness” would emphasize these crucial traits.
Despite these concerns, Terra Classic cannot be dismissed lightly, as it remains a cryptocurrency worth paying attention to for any subsequent exploits. This emerging resilience, paired with the unpredictability of the market, makes Terra Classic an intriguing player in the crypto space.
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