For the past few months, the terms Terra and Luna have been the center of various contentious discussions in the cryptocurrency community. Some believe that this effort is to blame for the severe crisis that has been roiling the cryptocurrency market since May.
It is therefore unexpected to find that the project appears to have seen a resurrection. Indeed, as news spreads, the value of Terra Project’s Luna Classic (LUC) cryptocurrency has increased recently. In the coming months, it intends to soar to even higher highs after becoming one of the major market movers during the previous week in the cryptocurrency market.
What is the history of the cryptocurrency Luna Classic?
It’s critical to look at this cryptocurrency’s foundational project in order to properly comprehend its evolution. Terraform Labs launched the Terra blockchain, a cryptocurrency concept, in 2018. In a short period of time, he was able to create an ecosystem that consisted of two key components: a native cryptocurrency named LUNA and a stablecoin whose value was pegged to the UST dollar.
The two corners that made up the project’s environment were complementary, which was one of its quirks. They were inextricably linked to one another in that the UST, whose value was roughly $1, needed to be balanced out by the value of LUNA.
Each user might so choose to trade $1 worth of LUNA for one UST. A clever and reliable exchange system that enables developers to automatically burn traded LUNA tokens in order to control both the supply and the value of the token.
What led to the collapse of the Terra blockchain ecosystem?
The Terra project quickly gained traction and rose in popularity due to its steady and meticulous method of operation. This was particularly true in 2021, a year that proved to be exceptional for the cryptocurrency market as a whole. The Terra project and its coin LUNA emerged as one of the most significant cryptocurrency initiatives on the market by the end of the year. A fleeting success, though.
In fact, despite the development of a once-thought-to-be-infallible system, it ultimately collapsed at the start of May 2022. a crash that instantly destroyed billions of dollars’ worth of value and brought down the whole crypto market.
The cryptocurrency market was experiencing widespread panic around this time, which forced the owners of LUNA and UST to sell their tokens in large quantities. The counterbalancing mechanism, which was unable to accommodate all transactions, was quickly overwhelmed by the massive spill that occurred on the Curve trading platform.
The price of the tokens kept falling as the relative supply of the currencies exceeded the demand, and the UST lost its linkage to the dollar.
Additionally, the Terra blockchain lost all of its investors’ faith during the meltdown since it malfunctioned twice. After the catastrophe, most significant exchanges were forced to erase all tokens connected to Terra.
How far is that?
Even though the Terra project was a dismal failure, Do Kwon, one of the two founders of Terra Labs, and many others in the community believed that there was still hope. They started thinking about ways to resolve the problem right away. The CEO of Binance was one of many who was prepared to assist. The latter had proposed to Do Kwon using Binance’s Bitcoin reserve to restore the UST to its desired value.
However, none of the options put out won Do Kwon over. The latter, in order to start the project from fresh, preferred to initiate a fork on the Terra blockchain. Despite opposition from the community, the CEO of Terraform Labs ultimately decided to execute the plan. A second coin called LUNA was created as a result of the fork, while its predecessor was given the name Luna Classic (LUC).
What factors led to LUNC’s evolution?
Numerous rumors have indicated that Terra is indeed making a comeback to the cryptocurrency market. an awakening that’s accompanied by a resurgence of enthusiasm for the project and the LUNC token.
There are many causes for this occurrence. The resumption of user-accessible staking since August 26 is unquestionably the first. Despite the recent incident, masses flocked to the token upon its reappearance, which had been eagerly anticipated by investors.
Investors, however, didn’t abruptly forget about this stock market collapse. The 130 LUNC cryptocurrency validators have pledged not to benefit from their labor, which is why so many are coming back to the initiative. They must first regain investors’ confidence and attract them again if they hope to increase the value of LUNC.
The fact that its price has soared from $0.00007154 to $0.0001636 during the past week indicates that the plan has unquestionably been successful. Estimates indicate that the Terra Classic (LUNC) will expand even more in September.
In fact, the 1.2 upgrade, which includes a new fee that permits tokens to be burned by 1.2%, will be released on September 12th. The latter is crucial since, in the opinion of many experts, it will contribute to raising the value of the cryptocurrency.