In the blockchain space, changes and developments take place very rapidly. Almost every day, there is a listing of new crypto, and one crashes down. One such crypto is Terra Luna Classic (LUNC). It is a blockchain-based cryptocurrency that seeks to build a stablecoin infrastructure on the Terra network. Terra is a decentralized network. It focuses on creating digital currencies with fixed prices that are linked to other conventional currencies, such as the dollar.
However, the collapse of LUNA in May 2022 marked the beginning of an extended downturn for cryptocurrencies. In this blog, we will understand
- What is Luna Classic
- Why and when it was launched?
- How much is it worth?
So, let’s get started.
Terra was founded in January 2018 with the primary goal of generating digital assets that are price-stable versus the world’s major monetary unit.
In May 2022, the Terra ecosystem started to lose its worth. As a result, on May 8, 2022, UST, now known as USTC (Terra Classic USD), lost its peg to the dollar. Because it was a stablecoin tied to the worth of the US dollar (USD), the depreciation of the peg caused a lot of upheavals and an array of cascading difficulties, causing its value to plummet.
The original Terra Luna blockchain’s native token is called Luna Classic (LUNC). After the recent failure of the UST/Luna cryptocurrency asset and the hard fork in Terra, this coin has changed its name.
Do Kwon, the co-founder of Terra, created a strategy for the Terra ecosystem’s revival in order to save the project. Thus, the blockchain underwent a hard fork, and it led to the arrival of the Luna 2.0 network. Basically, the idea behind Fork of Terra blockchain was to keep the ecosystem alive and rebuild trust.
With the recreation of a new LUNA token within the new chain, there was a rebranding of the previous LUNA token as Terra Classic (LUNC). The project does not use the stablecoin algorithm anymore. The Terra also provided an airdrop to investors in cryptocurrency who faced losses.
According to Terra 2.0’s policy, cryptocurrency investors who bought more than 10,000 LUNA before catastrophic damage will periodically receive extra LUNA tokens. To overcome the instability, LUNA released over 300% of tokens that were held by crypto investors at once, with the remaining 70% being distributed over two years.
Terra 2.0 uses a conventional proof-of-stake (PoS) consensus mechanism to verify transactions on the Terra 2.0 cryptocurrency network. More than 100 validators participate in the network consensus. The voting privileges are according to the number of LUNA 2.0 linked to each node. Thus, holders of LUNA 2.0 tokens can take part in the consensus by transferring their tokens to a validator of their choice.
Due to this mechanism, the validator also claims a stake. They ask for a commission fee before giving out incentives to delegators.
After the downfall, Terra launches the new LUNC on May 28, 2022. At that time, the market value of Luna Classic was $0.0001. It was expected to be low due to the downfall of the crypto market.
Although the cryptocurrency has rebounded after its disastrous collapse last year, there is still a great deal of doubt and mistrust in this cryptocurrency initiative. After the tax burn proposal was authorized and implemented on September 21, 2022, LUNC rose, though. The tax consumes 1.2% of each blockchain transaction, which will cause the supply of LUNC to fall and its demand to rise.
Various leading cryptocurrency tokens offered larger returns in 2023, but the LUNC found it difficult. In February 2023, the price of each token was $0.0002. Now, LUNC has adjusted to just $0.000085.
However, since the beginning of 2023, Terra Luna Classic (LUNC) has been declining and has decreased by 20% in May 2023. The unstable cryptocurrency has not been able to provide the market with large returns. However, according to some predictions, there will be a certain increment in the next five years.
Anyone looking for Terra LUNA 2.0 tokens should be aware that they must utilize a cryptocurrency exchange to convert their currency into LUNA. Since LUNA was relaunched in the wake of UST’s demise, it was removed from a number of exchanges and hasn’t yet been added back to them all.
Numerous cryptocurrency exchanges offer Luna Classic. These include, for instance, Binance, KuCoin, FTX, Crypto.com, Kraken, and eToro. The majority of the crypto exchanges that sponsored Luna 2.0 in the past will continue to support LUNC.
Almost all exchanges have a similar registration process, which includes choosing how to deposit cash, picking the investment amount, and choosing which wallet to use to hold your money.
The crypto market is volatile, and the recent developments make it hard to guess the future of Luna 2.0. Due to the demise of the UST stablecoin, it is difficult to accurately forecast LUNA 2.0’s future. Last year, the failure of Terra blockchain really shook the crypto investors.
However, there is a promising return of LUNC after the fork. With Binance announcing the LUNC tax burn on its transactions, there is an increase in its popularity. But, still, it is impossible to forecast the future using the past. There is a long distance to cover for Terra 2.0. Its performance will determine its success.
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A hard fork occurs when a blockchain splits into two different networks. The new coin, LUNC, or Luna Classic, was renamed, and the Terra ecosystem was renamed Terra Classic. Terra won’t have any UST or other algorithmic stablecoin components going forward as a result of this fork.
After the collapse of LUNA in May 2023, Do Kwon, co-founder of Terra, choose to go for a hard fork. Thus, Terra 2.0 was launched without a stablecoin. On the other hand, the older Terra blockchain token was renamed Luna Classic on May 28, 2023.
There are many exchanges on which Luna Classic is available. It is available on Binance, Crypto.com, KuCoin, and eToro.
At present, the coin is trading at around $0.0001, i.e., 0.1 thousandths of a dollar. It is 100% less than the $1 dollar mark. Thus, it is very difficult for Luna Classic to reach $1.