Terra Classic

Terra Classic, also known as LUNC, is the native token of the original Terra ecosystem. The Terra project was created in January 2018 by Do Kwon and Daniel Shin with the goal of facilitating the mass adoption of cryptocurrencies by creating a decentralized blockchain-based payment network. The project aimed to bootstrap a blockchain payment network to a large scale, similar to how large payment networks like Alipay and PayPal were instrumental in the growth of e-commerce platforms.

The original Luna token (LUNC) experienced significant growth, rising from less than $1 in early 2021 to around $116 in April 2022. This growth was largely driven by the promise of a 20% annual yield on the Anchor lending platform for staking UST holdings. However, the token's value plummeted to a fraction of a penny before the rebranding to Terra 2.0.

On May 25, 2022, a proposal was approved to reissue a new LUNA cryptocurrency and decouple from the devalued UST stablecoin. The original blockchain was renamed Terra Classic, and the original LUNA token became LUNA Classic (LUNC). The new LUNA coin, also known as Terra 2.0, lost valuation shortly after its listing on exchanges.

Following the collapse, the Terra Classic community initiated a burn movement to reduce the supply of LUNC and UST tokens. This movement aimed to stabilize market prices and repeg the UST stablecoin. As of June 1, 2024, a total of 116 billion LUNC have been burned, with 45.9 billion burned through on-chain taxation. Binance is the largest burner, responsible for removing 60.4 billion LUNC from the supply.

As of June 11, 2024, the live Terra Classic price is $0.0001031 USD with a 24-hour trading volume of $28391774.12 USD. The market capitalization stands at $602,043,477, and the circulating supply is 5,798,342,712,184 LUNC.

Terra Classic (LUNC) is the original native governance token of the Terra blockchain, created to stabilize the price of the UST stablecoin through an algorithmic mechanism. Here's how it works:

LUNC was designed to serve as a twin token to absorb any price deviation of the blockchain's algorithmic stablecoin, TerraUSD (UST). UST was supposed to maintain its price pegged to the U.S. dollar by creating (minting) and destroying (burning) UST tokens to balance the stablecoin's supply and demand at a $1 price peg. When UST lost its dollar peg and collapsed in May 2022, the token fell into a hyperinflationary spiral, causing the value of LUNC to plummet.

The algorithmic mechanism allowed users to burn LUNC to mint UST tokens or tokens tied to their local fiat currency. This process was intended to maintain the stablecoin's peg to the dollar. However, the collapse of UST led to the creation of trillions of tokens, diminishing the value of LUNC by almost 100%.

One key benefit of LUNC is that it has a native burn mechanism built into its code. A portion of all transaction fees on the Terra Classic blockchain are burned, permanently removing LUNC from circulation. This built-in deflationary pressure could support the price of LUNC over the long run. As long as the Terra Classic blockchain processes transactions, LUNC’s supply will slowly but steadily reduce over time.

Despite the collapse of Terra, LUNC still retains a use case as a medium of exchange within the Terra ecosystem. Many companies, projects, and decentralized applications (DApps) remain active on Terra Classic, using LUNC as the native currency for transactions. For example, MoonPay (cryptocurrency payment processor), Everpedia (peer-reviewed encyclopedia), and IQ Cash (Play-to-Earn gaming) continue to use LUNC for payments and in-game items/upgrades.

The future of LUNC is uncertain, but its native burn mechanism and potential role as a payment token within the Terra ecosystem could provide some fundamental price support. If economic activity and total value locked (TVL) gradually return to Terra Classic, LUNC could see increasing use as a payment currency within this ecosystem.

Terra Classic (LUNC) has several strengths that contribute to its potential growth and stability. One significant strength is its ability to show resilience and strength despite facing significant challenges. For instance, after the collapse of its stablecoin UST and the subsequent rebranding, the Terra community has been actively working to revive LUNC by burning tokens to ensure scarcity and retain value.

Another strength is the increasing optimism among analysts and the community. Crypto analyst Alex has expressed bullish sentiments, stating that LUNC is gaining energy for its next move and looks incredible. This optimism is reflected in the Fear & Greed Index, which currently stands at 75, indicating greed and a potential upward trend.

Additionally, Terra Classic's technical indicators suggest a potential increase in value. The Relative Strength Index (RSI) has risen past the 50.00 midpoint, indicating a bullish trend. The 50-Day SMA and 200-Day SMA also suggest a potential upward movement.

Lastly, Terra Classic's blockchain protocol, which utilizes stablecoins to power global payments, has the potential to create a new financial infrastructure. This focus on algorithmically stabilized stablecoins pegged to various fiat currencies could provide a strong foundation for the token's growth.

Terra Classic (LUNC) is associated with several risks that investors should be aware of. The current high volatility in trading prices on the Bitkub Exchange platform can lead to significant losses for investors. The coin has been experiencing a downward trend, dropping from its peak at $0.0002 to the current trading value of $0.00009972, representing a substantial 64.5% decrease, indicating strong selling pressure in the market.

The formation of a bearish pennant pattern on the daily time chart suggests that sellers are gaining momentum, which could lead to a further loss of around 30% if the bearish trend continues. Additionally, the correction trend breakdown below the 78.6% Fibonacci retracement level reflects the weakening of buyers' conviction in this asset.

Investors should also consider the impact of market dynamics and external factors, such as the crash of the UST stablecoin, which significantly affected the sustainability of investments in LUNC and LUNA. Understanding these risk factors is crucial for making informed investment decisions.

Furthermore, some experts predict that Terra Luna Classic may not be sustainable in the long term due to market factors, demand dynamics, and blockchain protocol stability. Overall, the risk factors for investing in LUNC are high, and investors should exercise caution and careful consideration before making investment decisions.

• Kevin H.: Team member at Terra Luna Classic (LUNC).
• The Vinh Nguyen: Team member at Terra Luna Classic (LUNC).
• Fabio Rodrigues: Team member at Terra Luna Classic (LUNC).
• Sook Jin Goh: Team member at Terra Luna Classic (LUNC).