The current crypto winter has turned out to be very severe. Miners, coin holders, as well as the creators of crypto projects themselves suffered. The most indicative is the story of Terraform Labs, which could not survive the market “cooling”. Even such major failures open up new opportunities, because thanks to this event, the LUNC token appeared – or Luna Classic, in simple terms. What opportunities the new project opens up, what it is and whether it is worth buying a LUNC coin – detailed answers to these questions will be presented in the current review.
How did the LUNC token come about?
The South Korean project was quite mature by the standards of the cryptocurrency world. His story is forever divided into “before” and “after”. Even now, the LUNC coin rests on the laurels of the main project, so it is worth considering it first.
South Korean developer Do Kwon founded Terraform Labs in 2018, its goal was to create digital means of payment that the people of the country could use on a daily basis. In 2020, Kwon launched his first stablecoin called Basis Cash. It is worth noting that a stablecoin is a token, the value of which is always equal to one asset with a stable value. The project was a failure, Basis Cash lost $54.5 million of its value. Then the developers managed to successfully hide this fact.
Then came the birth of UST and LUNA. The UST token has become an algorithmic stablecoin. For its functioning, the LUNA coin was launched. Tokens can be called “affiliate”. When the price of UST exceeded $1, the excess was converted into LUNA, with a decrease in the value of the stablecoin, the reverse mechanism worked. The coins kept the balance within the ecosystem. At the peak of popularity, the UST token took the 3rd place in terms of capitalization among all cryptocurrencies. The value of all UST and LUNA coins exceeded $60 billion. However, not everything was so smooth.
On the wave of popularity, Anchor Protocol was launched. A new project has been created for UST staking. The protocol attracted a huge number of users as they were offered returns of up to 20%. In theory, the UST was backed only by the LUNA coin, whose rate was inflated beyond belief. All this led to deplorable events. As early as May 8, 2022, the UST lost its peg to the dollar. On May 21, LUNA token was already trading at $0.0001, and UST at $0.05 per stablecoin.
The secret scheme was exposed by an anonymous Reddit user who posted the relevant documents. Two days before the collapse (May 6), Do Kwon’s bid to liquidate the company was approved by the Korean authorities. Already on May 8, an unknown person sold 350 million UST, which led to a panic sale and a collapse. According to one version, controlled chaos was launched by one of the American companies, which earned $ 1 billion from it. As a result, the project fell apart, and Do Kwon became a defendant in a criminal case.
Despite all the events, the Terraform Labs project has gathered a strong community around itself. Impoverished enthusiasts with depreciated coins in their hands took the project under guardianship, and a vote was held related to the future fate of the project. As a result, the depreciated LUNA token was named Terra Classic and the stock ticker LUNC. “Unsuccessful” UST has been renamed TerraClassicUSD with the ticker USTC. So all the old coins became “classic”, and the new LUNA coin switched to the Terra 2.0 blockchain. So a very controversial, but promising project called Terra Classic LUNC was released. We will consider its possibilities and prospects further.
Tokenomics of LUNC
The term “tokenomics” is synonymous with economics, with the proviso that it applies to the cryptocurrency industry. Tokenomics is not only supply and demand for Terra Luna Classic, but also its emission, distribution, as well as other official data about the asset. The most important indicator is the price of LUNC, as of September 2022, it is at $0.0003 or one and a half Russian kopecks per coin.
Here are the most important indicators related to the tokenomics of the LUNC cryptocurrency:
- The market capitalization is about $2 billion, the indicator is based on the LUNC rate for the current date, so the value is dynamic. At the same time, capitalization will remain at the same level in the near future. In the top cryptocoins LUNC today takes 33rd place.
- The circulating supply of 6.1 trillion LUNC – the number is a collection of coins in the hands of holders, as well as those on crypto exchanges.
- Terra LUNC’s maximum supply is the total number of issued tokens. Usually the number exceeds the number of circulating coins, since some of them are blocked for the purposes of the project. A total of 6.9 trillion LUNC tokens have been issued.
- The most activity is observed in the LUNC/USDT pair, the trading volume reaches $400 million, which is 50% of the approximate daily trading volume on all exchanges.
- Market dominance does not exceed 0.17%.
- Approximately 30 crypto exchanges and decentralized projects have listed the LUNC Classic coin, the largest of them are: Binance, KuCoin, Huobi, OKX and Kraken.
- Cryptocurrency Luna Classic has already attracted a sufficient number of hodlers. Approximately 11,700 hodlers created wallets. The top ten hodler whales hold 8% of the circulating supply.
- The graph of the dynamics of popularity states that the peaks of purchases occurred at the beginning of June and the first half of September.
Also, the latest news about LUNC is talking about the launch of staking. Indeed, the token belongs to the decentralized finance (DeFi) sector and works on the Proof-of-Stake algorithm. Therefore, exchange platforms offer to stake this asset. Now the market rate starts from 5% and reaches 12% per annum. Specific conditions depend on the exchange, the amount of coins provided and the blocking period. Already, 10% of LUNC from the total emission is staking.
Cryptocurrencies can contain deflationary mechanisms that allow creating a supply shortage. As a result, this leads to a rise in prices if all the necessary conditions are met. After all, a technically weak project “will not take off” even in the presence of a deflationary mechanism. Its most important part is the burning of coins. It was this technical solution that fueled the interest of crypto enthusiasts. The next section will be devoted entirely to burning the Luna Classic.
Among the enthusiasts there are quite wealthy and interested people. The community of the bankrupt project did not agree to accept the fate, they decided to raise the value of the LUNC coin by burning it. Indeed, if a certain part of the tokens never returns to circulation, then this will create deflation. For this purpose, the LUNC Burner service was launched by the community.
One of the reasons why LUNC surged in the bear market during the crypto winter is the triggering of the burn mechanism. In the first week of September, the value of the infamous asset rose by 300%. Indeed, this process can ensure that the price of the coin does not go down sharply and remains within the specified range.
Coins are burned only when they go to a special wallet, where they permanently settle. Such a crypto wallet only accepts coins, but it is not capable of sending them to other recipients. The creators also announced additional burning. The most famous exchanges have joined the project, now 1.2% of all transactions with LUNC are burned. This means that the mechanism of burning turned out to be “double” – coins are destroyed by creators and enthusiasts, as well as cryptocurrency exchanges.
According to the LUNC Burner service, enthusiasts destroyed 3.9 billion coins, which is 0.056% of the total Luna Classic supply. Every day, the LUNC burn irretrievably takes up to 40 million tokens from the community. The coin has shown good results after such a loud failure, but for now, traders and investors should not flatter themselves. The deflationary mechanism has its drawbacks. For example, with a sharp increase in the price of an asset, new traders stop buying it and lose interest in it. It is also worth remembering that LUNC parasitizes on the legacy of the once famous LUNA coin, without bringing much benefit to the real world.
What caused the growth of LUNC?
By mid-2022, the token hit a historic low of $0.000016. However, the community took the project into their own hands in a timely manner. Since then, LUNC has been growing and has already added 1920%, then went into a slight correction. What is the reason for such rapid growth?
The main growth drivers were:
- introduction of the combustion mechanism;
- restoring LUNC staking;
- introduction of exchange “taxes” on transactions;
- encouraged community activities and scalper activities.
Experts argue that the growth is very relative. They remind that in the recent past, the coin at its peak showed a rate of $119.18. This is the number to work with. Relative to this rate, the coin recovered only by one ten-thousandth. The latest LUNC cryptocurrency news shows that it remains a purely speculative asset, like the newly minted Luna 2.0 (which has fallen in price by 90% since listing).
The growth potential may be leveled by the following actual circumstances:
- lack of valuable protocols, since all projects migrated;
- low activity of users and developers;
- no real benefit to society.
This does not mean that the project has no future. It is quite possible that the developers will create their own decentralized exchange, LUNC will become a means of payment and the coin will be used to pay in supermarkets. A prime example would be SHIB, which was originally a meme-coin and then evolved. The main criterion will be the honesty of the developers and the usefulness of the project for the crypto community and people in general.
LUNC Price Prediction
The crypto community is actively discussing growth opportunities. Optimists say the price of the LUNC cryptocurrency will approach the $1 mark. Let’s apply simple mathematics: at this price, the capitalization of LUNC will be $6.9 trillion, which exceeds the value of all existing cryptocurrencies by about 7 times. However, enthusiasts made calculations taking into account the burned coins. Every dollar invested today will turn into a thousand, but such a prospect will appear only in 7-8 years.
If you study the assessments of experts, they are not so positive. They believe that there are no reasons for growth at a fundamental level, trust in the project has been undermined, and any attempts to “resurrect” will not bring success. The token has become a junk asset that will be subject to regular pump and dump schemes. However, in all of the above, you can find their pluses.
An investor can create a LUNC wallet in MetaMask or with a cold Trezor wallet. Deposit a small amount that you do not mind losing, then forget about the purchase for a long time. This will allow you to invest now, making a profit as in the “early stages”. You can also benefit from the high volatility of the asset, which will be relevant for those who trade within one day.
Such assets are associated with high risk. Market rules have not been canceled, so we can say that now the asset is overbought. The LUNC token will still show thousands of percent returns, but this will take many years. At the same time, do not forget that LUNC is an exchange-traded asset, therefore it lends itself to technical analysis.
The coin is in a bullish trend right now, with many traders trying to trade breakouts by investing in the short to medium term. Fundamental wave analysis shows that the immediate target could be the $0.001 price mark, which will bring 800% profit. Do not forget that this is just one of the trading ideas that may come true this year.
There is also a more positive LUNC forecast associated with Fibonacci levels. The resistance line may cross with the 0.786 Fibonacci level. If the price target is not reached, then the asset will go into a deep correction. Only then is it possible to fully recover and reach $0.10. In the current review, we have reviewed all the current LUNC news. It is worth considering that the price of the LUNC cryptocurrency will start its victorious march no earlier than 2023. Therefore, in relation to the Luna Classic, it is worth choosing a medium-term or long-term strategy.