Terra Classic (LUNC) is the name of the negative blockchain after the spin-off of Terra Blockchain in May 2022. Terra Blockchain is a decentralized blockchain system that allows users to create stablecoins. Terra Classic Blockchain enabled the instant creation, collection, exchange, and trading of Stablecoins.
In cryptocurrency, the Terra Classic (LUNC) protocol is a system for generating stablecoins pegged to fiat currencies. Terra Classic uses blockchain technology and enables the creation of stable cryptocurrencies or the conversion of existing stable cryptocurrencies into USD-equivalent assets using smart contracts.
The Terra Classic (LUNC) network uses Delegated Proof-of-Stake (DPoS) as a consensus mechanism. This proof-of-Stake (PoS) process variant is more efficient and democratic.
LUNC Coin Initiative
The Terra Classic system had two basic cryptocurrencies: Terra Classic stablecoins and the LUNC currency. The largest stablecoin in Terra is USTC (USTC before the Hard Fork), whose theoretical value is equivalent to the US dollar.
Terra Classic experienced a sharp devaluation in May 2022, when the price of USTC was destabilized by $1. This devaluation reached 99.99 percent on the LUNC side and 98 percent on the USTC side at a par value of US$1.
Prior to the hard fork, LUNC acted as a native staking token that captured the price fluctuations of stablecoins created on Terra Classic. Through the Terra Classic network, users can burn LUNC tokens to create stablecoins like USTC. For example, 1 USD worth of LUNC tokens must be destroyed to generate 1 USTC. Each time a LUNC coin is burned, the LUNC price increases as the number of coins in circulation decreases. Users can exchange 1 USTC token for 1 USD worth of LUNC tokens at the current market price. If the amount of LUNC tokens in circulation increases, the price may be pressured.
Given the price volatility on the USTC side and the price stability of 1 USD, investors took advantage of the large arbitrage opportunity between USTC and LUNC in May 2022. The aforementioned conversion between USTC and LUNC was primarily responsible for this arbitrage. Investors bought USTCs cheaply, converted them to LUNCs, and then sold them again. In this way, new supplies of LUNC were constantly coming onto the market, while the price of LUNC fell significantly.
With this significant loss of value and trust, the LUNC team performed a hard fork on block 7790000 in May 2022, creating the Terra 2.0 version of the LUNA blockchain.
Who founded the Terra Classic (LUNC) initiative?
Do Kwon and Daniel Shin of Terra Classic form Labs founded the Terra Classic (LUNC) project in 2018, and Do Kwon continues to lead the new Terra 2.0 blockchain project as its creator after the blockchain fork.
Do Kwon, who is also the CEO of Terra Classic from Labs, is known for his blockchain investments and efforts. Daniel Shin is the founder and CEO of not only Terra Classic (LUNC), but also Chai, a major payments company in Asia.
LUNC Coin Information
There is no cap on supply for the LUNC Coin. Before the hard fork, users of the Terra Classic platform could exchange USTC for LUNC or LUNC for USTC. When the price of USTC failed to stabilize at $1 in May 2022, the supply of LUNC steadily increased.
The distribution of the LUNC coin, which was launched on July 26, 2019 in a quantity of 385,284,974, is as follows:
- 26%: Investors 20%: Reserves for stabilization 20%: Terra Classic Alliance
- 20%: Participant and employee pool 10%: Terra Classicform Labs
- 4%: Genesis Liquidity
Terra Classic (LUNC) Forking.
Terra Classic (LUNC) will allow on-chain transfers in May 2022 when the main development team completes the hard fork. During the USTC issue, the team temporarily halted on-chain swaps and stablecoin creation, and no development or updates were made to the legacy blockchain after the fork.
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