Terra Luna Classic Price Prediction, will LUNC’s price hit $12.40?

Terra is an open-source blockchain protocol for hosting a dynamic ecosystem of dApps and top-tier development tools. Terra's blockchain carves a path for the next-gen DeFi experience by harnessing a proof-of-stake consensus mechanism.

In addition to this, Terra is also a payments platform for an algorithmic stablecoin designed to chase the price of a fiat (government-backed) currency.
 

Terra was developed by Terraform Labs in 2018. Do Kwon and Daniel Shin founded this South Korea-based lab to infuse the best features of a fiat currency and Bitcoin [BTC] into a price-stable coin.
 

The Terra protocol's native token is mainly used for staking. Apart from this, it can also be used for governance that allows users to make changes to the Terra protocol.
 

After its 2018 launch, the altcoin's chief role was to serve the purpose of a 'counterpart' in absorbing price fluctuations of Terra's algorithmic stablecoin, terraUSD (UST).

The attack that changed it all

Post an attack which exploited a loophole in the blockchain's protocol, UST failed to aptly mint and burn its tokens to create a balance of its demand and supply at the $1 peg. Subsequent to losing its dollar peg, UST witnessed a catastrophic [almost 100%] loss of value, one that has gone down the history of major crypto-collapses.

The resultant events led Do Kwon to rev up the revival efforts. In doing so, he proposed a hard fork for which the majority of the community members voted in favor.
 

Thus, two Terra blockchains would now function parallelly:

• The original Terra blockchain with the token re-branded to 'Luna Classic (LUNC)' from 'LUNA'
•  A newly launched blockchain protocol with its native token called ‘LUNA’

LUNA was ranked the seventh-largest crypto by market capitalization at some point this year. After the most recent turn of events, LUNC's ranking is well above 200. 
 

As we saw above, Terra's breakdown propelled the creation of a new chain while the old chain was renamed 'Terra Classic (LUNC)'.
 

On the flip side, the aim of Terra 2.0 would be to inherit all the protocols and applications of the former network. This, however, does leave us with the question of LUNC's functional or practical utility in the coming times. 
 

Terra community reflected robust comeback inclinations as they keep their hopes alive amid LUNC's burn process. So far, the broader sentiment toward this restructuring plan has turned out to be quite positive, as evidenced by >170% weekly gains towards the end of August.
 

What does LUNC's road ahead look like?

• COMMUNITY SENTIMENT

Despite the recent crumbling of its network, LUNC's community is exhibiting promising signs of revival as '#LUNCcommunity' has been trending on Twitter. 

The community has aided the coin's recovery by passing critical proposals on  LUNC's burn in the hope to recoup the losses of the previous meltdown.

While Do Kwon and his team focus on the developmental aspects of Terra 2, Luna Classic would be run by its community.
 

In the wake of increasing traction towards positive sentiment among the community, LUNC's price could keep rising in the coming months.

The rising social dominance, especially during the start of this month aided the coin in testing the $0.000517-resistance before facing some selling pressure.

Nonetheless, with Bitcoin facing serious sell pressure over the last week, the broader market sentiment has taken a toll. It would be interesting to witness how LUNC’s social dominance would play out to ultimately affect its perception in investors’ minds.

• EFFECTS OF LUNC's BURN TAX

The community is now implementing a 1.2% burn tax on all of LUNC's transactions (that includes buying and selling). These efforts could put LUNC in a better position to reverse the previously caused damages due to over-minting.
 

This simply means that 1.2% of all LUNC tokens exchanged for a given value will be destroyed at the time of the transaction.

This burn's ultimate aim would be to bring down the LUNC's supply from 6.5 trillion to 10 Billion. While this mechanism creates a clear path for a decrease in supply, the corresponding demand could also see a substantial rise in the coming times.

All in all, the value of the digital asset is still significantly down from where it was trading before the crash, but a sustained burn could help recover some of those losses. 
 

It will be the validators who reduce the supply and repair the damage. Optimism is quite evident, however, especially from the triple-digit gains in social mentions and engagement, as seen on LunarCrush.

• SUPPORT FROM EXCHANGES

With Exchanges like Binance and KuCoin showing their willingness to support the above burn, LUNC has seen promising revival signs. This could in turn encourage more exchanges to exhibit well-needed support for the community's recouping endeavours.
 

Finally, the culmination of  improved social perception alongside LUNC's burn mechanism plan has set a solid foundation for the altcoin's near-term growth prospects. 
 

Also, sustained support from top exchanges would help LUNC ramp up the trading volumes to sustain its bull run in the months to come.