After the collapse of the Terra ecosystem, LUNA became Terra Luna Class (LUNC) and the price has been recovering strongly.  Since the all time low on the 13th May, when the price fell to just $0.000000999967, the price has rallied 27,000%. 

luna classic price

The fall of Luna

Terra’s LUNA was one of the most remarkable stories of the year.  LUNA, which functioned in symbiosis with the stablecoin UST, allowed for people to speculate on the growth of the stablecoin.

The stablecoin UST grew at an astonishing rate, and became one of the largest stablecoins by market cap.

The Terra ecosystem was backed by some of the largest and most respected figures in the industry, such as Three Arrows Capital, Celsius, and Galaxy Digital’s Mike Novogratz, who even arranged to have LUNA tattooed onto his arm (he has since reflection that the debacle was a lesson in exuberance).

The UST stablecoin lost peg a few times throughout its life cycle, but was always able to eventually reclaim $1.

As the project grew, the founder Do Kwon decided that it would be beneficial to have UST backed by something more than just LUNA and the confidence of market participants. The extent to which the project was dependent on confidence was astonishing, and once the confidence had been lost LUNA was doomed.

The algorithmic stablecoin functioned in such a way that when UST lost its peg, it created a high degree of inflation in LUNA, which pushed the price downwards.

The symbiosis of the LUNA with UST was ultimately the downfall of both, and within a few days LUNA fell 99% in price several times over.

The crash had destroyed the life savings of hundreds of thousands of people worldwide who had believed in Do Kwon and didn’t understand the risk that they were taking on.

Luna Classic price is recovering – is it a dead cat bounce?

Since falling over 99.999% from all time highs, the price of LUNA had very little room to go down much further.

Billions of dollars had been destroyed, and there were simply weren’t many more sellers.

Nevertheless, for a community that had so much scope and support, and given the fact that blockchains themselves are very difficult to completely destroy,

In the aftermath of the collapse, LUNA was rebranded to LUNC, and the new LUNA was born, to be seemingly headed once more by Do Kwon – who still isn’t in prison.

Is there any future for Terra Classic?

At its all time high, the Terra ecosystem was worth well over $40 billion, and the price of LUNA reached an all time high of $119.

The resilience of communities is the crypto space has been evidenced not only by those who are still clinging on to LUNC, but can also be seen in segment of the Celsius community that still hopes a short squeeze can solve all their problems and somehow save the company.

It seems unlikely that the LUNC is simply going to disappear – the project reached enough of a critical mass to have become culturally significant in the crypto space, and the shared experiences that people have felt as the project has developed.

For those who wish to speculate and trade, the high volatility will provide some great opportunities, but one should be cautious to use stop losses and be responsible.

1.2% burn mechanism on swaps

Some of the new changes that are being introduced for LUNC include the 1.2% burn mechanism for swaps, which aims to make LUNC inherently deflationary.

The implementation is being supported, and since is where most of LUNA’s volume is traded (over 50% in the past 24 hours) a lot of speculators are using the platform.

Consequently, despite the complete collapse and failure of the stablecoin aspect of the ecosystem, LUNC may continue to operate as an asset that can be owned with deflationary tokenomics.

The fully diluted market cap of LUNC now stands at $1.8 billion. Now that the links to the stablecoin UST have been severed and it can no longer suffer hyperinflation-related issues, LUNC may be an interesting upside that could have highly risk upside.

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