Terra Luna Classic Price Prediction, will LUNC’s price hit $0.00026?

Terra Luna Classic (LUNC): An overview

Source: LUNC classic community/X

Terra, now known as Terra Luna Classic (LUNC), is an open-source blockchain protocol for hosting a dynamic ecosystem of decentralized applications (dApps) and top-tier development tools. It is built on the Cosmos SDK. The blockchain carves a path for the next-gen decentralized finance (DeFi) experience by harnessing a proof-of-stake (PoS) consensus mechanism called Tendermint.

The network’s native token, LUNC, 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. 

It is also a payment platform for an algorithmic stablecoin, and its chief role was to serve the purpose of a “counterpart” in absorbing price fluctuations of terraUSD (UST), which is now known as Terra Classic USD (USTC).

The attack that changed it all

Post an attack that 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 99%] 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 now function parallelly:

• The original Terra blockchain with the token rebranded to “Luna Classic (LUNC).” 
• A newly launched blockchain protocol called Terra 2.0  with its native token called “LUNA.”

The aim of Terra 2.0 was to inherit all the protocols and applications of the former network. There was also a significant update related to the network's stablecoins. 

All of the original network stablecoins, including UST, KRT, and EUT, underwent a renaming process. They were then known as Terra Classic stablecoins, designated as USTC, KRTC, and EUTC, respectively. 

Notably, the new blockchain iteration did not feature any "Terra" branded stablecoins. This distinction further differentiated the original from the new chain, reinforcing the legacy of the former while setting the stage for the innovations and offerings of the latter.

What does LUNC's road ahead look like?

Source: LUNC classic community/X

Community sentiment

Despite the crumbling of its network, LUNC's community exhibited promising signs of revival as “#LUNCcommunity” was trending on Twitter. 

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

While Kwon and his team focused on the developmental aspects of Terra 2.0, Luna Classic was handed over and is now run by its community.

Effects of LUNC's burn tax

In an effort to redress the damages from over-minting, the community initiated a token burn mechanism. This initiative began with a burn rate of 1.2% for every LUNC transaction, aiming to reduce the supply from 6.8 trillion to 10 billion. The intention was not just to limit supply but to bolster its demand and value, especially in the aftermath of a substantial market crash.

Validators took a front seat in orchestrating this reduction, and their efforts didn't go unnoticed. A surge in social mentions and engagement, particularly on platforms like LunarCrush, indicated a positive response from the community.

Major exchanges, namely Binance and KuCoin, stepped up, backing the burn mechanism, which, in turn, sent encouraging signals to other platforms to support LUNC's recovery. This amalgamation of social traction and exchange support set the stage for the cryptocurrency's potential growth.

Since May 2022, around 74.91 billion LUNC have been burned. While the initial burn rate was 1.2% per transaction, an adjustment saw it drop to 0.2%, aiming to invigorate blockchain activity. 

However, this rate wasn't impactful enough on the circulating supply. Recognizing this, a proposal was made in March 2023, and by May of the same year, the burn rate was elevated to 0.5%. As of November 2023, 5.84 trillion LUNC are in circulation.

What’s happening with USTC?

In September 2023, the Terra LUNA Classic community voted in favor of suspending the minting of USTC. The primary concern was the USTC-LUNA swap mechanism, which allowed users to easily exchange UST and LUNA. However, this method became problematic during financial crises. 

To safeguard investor interests, a proposal was made to discontinue this swapping mechanism. This proposal is essentially an attempt to restore the coin’s peg to the U.S. dollar.

History of Terra

Source: Terra.money

The Terra blockchain was developed by Terraform Labs. The company was founded by Daniel Shin and Kwon and debuted in January 2018. Following its introduction, an Initial Coin Offering (ICO) for its native token, LUNA, was conducted in early 2019. Terra's exceptional performance in the subsequent years propelled it into the top 10 largest cryptocurrencies globally based on market capitalization.

Terra's white paper elucidates the vision of its founders: they aspired to actualize Bitcoin’s (BTC) initial ambition—a decentralized peer-to-peer (P2P) electronic cash system. In their pursuit of this vision, they devised a unique approach using stablecoins. 

Before co-founding Terra, Shin's entrepreneurial journey included launching Ticket Monster (TMON), a prominent e-commerce entity in South Korea. He later co-initiated Fast Track Asia, an incubator assisting entrepreneurs in sculpting their fledgling companies into robust enterprises.

On the other hand, Kwon's resume boasts the founding of Anyfi, a startup dedicated to decentralized wireless mesh networking solutions. He has further sharpened his skills during stints as a software engineer with industry giants like Microsoft and Apple.