What Is Terra Classic (LUNC)? How It Works & Where To Buy It

Terra Classic (LUNC) is the rebranded Terra Luna (LUNA) coin, which was one of the largest cryptocurrencies back in early 2022. However, after the Terra ecosystem collapsed, the community decided to rename the original Luna coin to LUNC and keep it operational as a legacy crypto.

Let’s find out what happened with the original LUNA coin and the turbulent events that led to its collapse and subsequent rebranding to Terra Classic.

How Terra Classic (LUNC) Works

In early 2022, the original LUNA coin was one of the top projects on the crypto scene, with a multi-billion dollar market capitalization.

LUNA was part of a two-currency ecosystem. One of the coins was the Terra USD (UST) dollar-pegged stablecoin, and the other was LUNA. While UST was designed as an algorithmic stablecoin tied to the US dollar, LUNA was the ecosystem’s volatile crypto. 

LUNA’s role was to help maintain the UST dollar peg through a complex computer algorithm that inflated and deflated the coin’s supply according to fluctuating market demand for the UST stablecoin.

Each UST coin was redeemable for 1 USD worth of LUNA, and every time the algorithm minted a new UST coin, it had to burn 1 USD worth of LUNA. As the market cap and user demand for UST grew, so did the value of LUNA.

At one point, UST was the largest algorithmic stablecoin on the market.

The mechanism worked relatively smoothly from September 2020 to May 2022, and LUNA had a thriving ecosystem of DeFi platforms that enabled users to engage in yield farming with the help of LUNA and UST coins. 

However, the UST stablecoin suffered a massive de-peg in May 2022 due to huge withdrawals of multi-billion dollar sums from its Anchor Protocol DeFi platform. Apparently, some investors started withdrawing hundreds of millions of dollars worth of UST to cash out their high staking yields from Anchor Protocol.

LUNA couldn’t handle this amount of simultaneous sell-offs of UST, and users started panicking because their UST stablecoins started losing their dollar peg. This led to a massive drop in LUNA’s value, as the coin tumbled from more than 100 USD per coin to a fraction of a US dollar cent. 

The Terra ecosystem collapsed in a matter of days, and the LUNA-UST algorithm went defunct. More than 60 billion USD of assets were lost in the Terra Luna implosion, and the crypto community was furious.

The Terra community didn’t want to give up on the project, and after a snapshot vote, the community decided to rename LUNA into Terra Classic (LUNC). Simultaneously, the Terra blockchain was forked, thus creating a new LUNA crypto in the process. Now there’s the old LUNC crypto and the new LUNA coin.

What Is Terra Classic (LUNC) Used For?

Before becoming LUNC, LUNA was highly popular as a DeFi crypto, enabling users to earn high yields on numerous staking platforms and liquidity-providing protocols. However, since the rebranding to LUNC, all of that utility is gone. 

LUNC became a highly speculative cryptocurrency without any practical utility. Most of the developers moved either to the new LUNA chain or to other DeFi-focused crypto networks. The primary use case of LUNC today is for token holders to participate in the governance of the crypto and for traders to use LUNC as an asset for short-term trading gains.

LUNC is now an extremely volatile crypto, with highly-unpredictable price changes that aren’t tied to any specific project development events. Unlike many reputable cryptos whose price rises when the projects introduce new features or partnerships, LUNC has no notable software development plans. This makes it extremely hard to estimate in which direction will the LUNC price go. 

However, this high volatility makes LUNC an excellent crypto for experienced traders who use trading tactics such as arbitrage trading. In arbitrage trading, users tend to buy a crypto for a lower price on one exchange and then immediately re-sell it on another platform where the price is a bit higher.

LUNC is useful for this trading strategy because its price has very rapid price fluctuations, and experienced traders can earn considerable profits when closing a successful arbitrage with vast amounts of LUNC.

Apart from trading, LUNC isn’t useful for anything else, especially not for long-term holding, because there’s no development potential for the coin. 

Where to Buy Terra Classic (LUNC)?

Despite lacking use cases for LUNC and besides being a speculative trading asset, the coin is available on over 50 centralized and decentralized crypto trading platforms. 

Some of the CEX platforms that support LUNC are Binance, Kraken, and KuCoin, while TraderJoe, UniSwap, and PancakeSwap are the most popular DEX platforms where you can purchase LUNC.

You can buy LUNC with Tether (USDT) on Binance and KuCoin, while Kraken even allows you to make direct LUNC purchases with EUR and USD fiat currencies.

As for the DEX platforms, PancakeSwap has the most trading pairs, and you can buy LUNC with USDT, USTC, Binance USD (BUSD), and USD Coin (USDC).

How Long Has Terra Classic (LUNC) Been Around? 

The original LUNA coin was launched in 2018, while LUNC has been around since mid-2022 when the LUNA community voted to rename the original coin to Terra Classic.

What’s Controversial About Terra Classic (LUNC)?

It’s safe to say that LUNC is one of the most controversial cryptocurrencies on the market because of its predecessor LUNA and the unfortunate events that led to the creation of LUNC.

The original LUNA coin became massively popular thanks to its algorithmic dual mechanism with Terra USD, and for a year and a half, it was highly successful. The project seemingly proved that a dual-crypto inflationary and deflationary model could sustain an algorithmic stablecoin with huge market demand. LUNA’s founder, Do Kwon, consistently ensured the public that the LUNA-UST system is flawless.

However, in May 2022, during the mass withdrawal of UST and LUNA from DeFi platforms, such as Anchor Protocol, the system simply couldn’t keep up and maintain the UST dollar peg, which led to both LUNA and UST’s crash. 

Furthermore, after the LUNA crash, rumors arose about Do Kwon being aware of LUNA’s flaws before the crash. Also, there were various claims about Do Kwon being among the people who participated in the massive withdrawals before the crash. The case went to court, and Do Kwon is currently a fugitive with an international arrest warrant. 

Additionally, there aren’t any development plans for LUNC or any future perspective that may attract users toward the coin apart from using it for short-term trading.

How Many Terra Classic Coins Are There?

The LUNC supply is extremely inflated as part of an early attempt to mitigate the crash of the UST stablecoin, but this mechanism didn’t have any positive results. LUNC was left with a huge supply of over five trillion coins, and the community is attempting to boost the value of LUNC by conducting periodic token burns that essentially destroy portions of LUNC tokens. 

The logic behind the burns is that a decrease in the LUNC supply might eventually lead to a price increase in the coin. However, this is also relatively fruitless for now.

Can LUNC Be Mined?

LUNC was originally a Proof-of-Stake (PoS) digital currency that allowed users to stake their LUNA across numerous DeFi platforms and crypto wallets with staking features.

However, with the collapse of the ecosystem of decentralized apps (dApps) that support LUNA, there aren’t any options to stake LUNC anymore, which means users can’t mine or stake LUNC.

Market Cap and Price History of Terra Classic (LUNC)

Before becoming LUNC, LUNA reached an all-time high of around 115 USD, but during the LUNA crash, the price of just started dropping rapidly until it reached 0.00012 USD in mid-May 2022.

However, that wasn’t the end. LUNA dropped even further down to 0.00007 USD just before the rebranding to Terra Classic. 

The price of LUNC managed to recover to a price range between 0.00015 to 0.0003 USD, and since then, the coin’s price has been dramatically jumping and falling in value, sometimes with double-digit changes in under 24 hours.

As for the LUNC market cap, it remained surprisingly high despite the LUNA crash and is currently sitting at around 700 million USD because of the huge number of traders who are using it for short-term trades.

Biggest Competitors of Terra Classic (LUNC)

LUNC isn’t a competitive cryptocurrency anymore because there’s no development team behind the project, and there aren’t any plans to roll out any new features or improvements of LUNC. Consequently, it’s unrealistic to compare LUNC with other digital currencies.

What Does the Terra Classic (LUNC) Project Road Map Look Like?

The fact that LUNC is essentially abandoned by its developer community means that there isn’t any future development roadmap for LUNC. This might change at one point if some developers from the LUNC community decide to try and breathe new life into LUNC. However, the possibilities of this happening are very low.

Pros and Cons of Terra Classic (LUNC)

Pros

• Traders can use LUNC as a speculative asset for quick gains in arbitrage trading.

Cons

• LUNC is the result of the controversial LUNA crash.
• LUNC doesn’t have any utility.
• Users can’t earn staking rewards from LUNC.
• LUNC doesn’t have any future development potential.