Luna Classic or LUNC ( LUNC/USDT – Trade it here ) is the native asset of the Terra Classic blockchain, and was under the name LUNA at first. The collapse of LUNA and UST in May 2022 has led to the hard fork into Terra and the rename of this token: from LUNA to Luna Classic (LUNC). The token name “LUNA” now actually refers to the LUNA 2.0, the native asset of the new Terra Luna blockchain that was created to rescue the collapse.
In short, due to the hard fork, Terra is now running two parallel blockchains:
- The original Terra blockchain, also known as the Terra Classic blockchain, with its native asset Luna Classic (LUNC), and its twin coin TerraClassicUSD (USTC).
- The new Terra blockchain, with its native asset Luna 2.0 (LUNA).
In this article, we will mainly be talking about LUNC.
LUNC Core Features
The Terra Classic network was also previously known as the Terra Blockchain but was later rebranded by its co-founder Do Kwon as part of his revitalization plan. He created the brand new Terra 2.0 network.
The new LUNA (i.e., LUNA 2.0) is the native token of the new Terra chain. As part of the Terra (LUNA) revival plan, its founder, Do Kwon, leveraged Terraform Labs to redesign a separate Terra blockchain. Previously, the attack on the old Terra chain directly led to the decoupling of the UST stablecoin and the collapse of the price of the LUNA (now LUNC) token, which also caused the global crypto market to lose more than $40 billion. In this time of life and death, the new Terra protocol and LUNA came into being.
LUNC is paired with USTC to maintain the price of USTC, an algorithmic stablecoin that serves the purpose of sustaining its price stability. USTC is supposed to be 1-to-1 pegged to US dollars, which means that 1 USTC should equal $1.
Terra Classic’s “mint and burn” mechanism is utilized to achieve price stability.
- When USTC’s price < $1, users and arbitrageurs may send (burn) 1 USTC to the system and receive (mint) $1 worth of LUNC.
- When USTC’s price > $1, users and arbitrageurs may send (burn) $1’s worth of LUNC to the system and receive (mint) 1 UST.
To learn more about the hard fork, original Terra blockchain, and TerraClassicUSD (USTC), please click here to continue reading.
LUNC Use cases
LUNC is the native token of the Terra Classic blockchain, and users can use the token to:
- Stake to earn rewards from transaction fees.
- Participate in treasury governance, proposals and voting.
- Pay fees for transactions and data storage.
The mechanism and burn of LUNC
Terra Classic users can stake LUNA Classic (LUNC) to validators responsible for validating all transactions within the blockchain and recording them in blocks. In return, the validator will receive a percentage of LUNC tokens as a reward for the validation work.
When the demand for the Terra Classic stablecoin increases, there is concern that the stablecoin will be worth more than the fiat currency pegged to it. In this case, the ecosystem would burn more LUNC tokens from its total supply to mint stablecoins that match demand and pull the price back into the fiat-pegged range.
As the token burn rate increases, the circulating supply of LUNC will decrease, and its price will gradually climb. The increased demand for the Terra Classic stablecoin will further increase the investment value of LUNC. On the other hand, if demand for USTC stablecoins declines, their price may also fall below the fiat currency to which they are pegged. In this case, the Terra Classic ecosystem burns a certain amount of stablecoins and mints more LUNC tokens, which means that when USTC demand falls, LUNC circulation supply increases, which in turn causes LUNC prices to slide further.
How to buy LUNC?
You can buy LUNC on MEXC following the steps:
1. Log in to your MEXC account and click [Trade]. Click on [Spot].
2. Search “LUNC” using the search bar to see the available trading pairs. Take LUNC/USDT as an example.
3. Scroll down and go to the [Spot] box. Enter the amount of LUNC you want to buy. You can choose from opening a Limit order, a Market order, or a Stop-limit order. Take Market order as an example. Click [Buy LUNC] to confirm your order. You will find the purchased LUNC in your Spot Wallet.
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