Luna Classic

Luna Classic

LUNC
$0.00013295
-9.79%
$0.00012901

24H Price

$0.00015442


About Luna Classic

Luna classic (LUNC) is the native token of the original Terra blockchain, which was launched in 2018. At that time, the token’s name was LUNA. In the wake of the collapse of the blockchain’s algorithmic stablecoin, TerraUSD (UST), in May 2022, the community voted to create a new blockchain.

After the launch of “Terra 2,” the native token of the new network inherited the LUNA name, while the old blockchain’s token was rebranded to luna classic (LUNC).

The goal of Terra Labs, the firm that developed the coins, is that the protocols and applications of the former network will migrate to the new blockchain (Terra 2). But as of June 2022, the future utility of the original Terra blockchain is uncertain.

Luna Classic price

As of May 2022, LUNC’s all-time highest price was $119.02 (when it was still the old LUNA token), recorded in April 2022. The token rallied past $100 from a few dollars in less than a year and became one of the top 10 cryptocurrency by market capitalization as sustained demand for Terra’s stablecoin resulted in a dwindling LUNC supply.

The main trigger for the demand was Anchor, Terra’s yield-generating platform, which offered eye-popping but ultimately unsustainable, annual rewards on UST deposits of up to 20%. As deposits on Anchor blasted through $14 billion in UST in April 2022, the circulating supply of the old LUNA tokens fell below 400 million tokens for the first time ever.

In early May 2022, UST’s price deviated from the $1 peg and investors started to flee from Anchor, which was the main driver for UST’s demand. Steps to recover the peg proved to be short-lived, and UST lost its price peg during the week of May 9, 2022 again, eventually falling to pennies. UST’s collapse and the bank run on Anchor drove the original LUNA into a hyperinflationary cycle and the token’s price fell to cents.

How does Luna Classic work?

Luna classic was created to be the native token of the original Terra blockchain. It acted as the twin token that was designed to absorb any price deviation of the blockchain’s algorithmic stablecoin, TerraUSD (UST). UST was supposed to keep a one-to-one exchange rate to the U.S. dollar by creating (minting) and (destroying) burning UST tokens to balance the stablecoin’s supply and demand at a $1 price peg.

Many deemed the design inherently unstable and vulnerable to attacks. UST and LUNC eventually collapsed in the first half of May 2022, wiping out billions of dollars in investments from average retail investors and big-name institutions.

Key events and management

In early 2018, Do Kwon and Daniel Shin launched the Terra network with plans to develop an e-commerce payments app with a price-stable cryptocurrency.

In July 2021, the company raised $150 million from investors, including Arrington XRP Capital, Pantera Capital, Galaxy Digital and BlockTower Capital. The funding went to Terra’s Ecosystem Fund, which sponsors projects on the Terra blockchain. Prior to that, the company had raised $25 million in January of the same year.

In September 2021, Kwon was served with a subpoena by the U.S. Securities and Exchange Commission, asking him to testify about Terra’s Mirror Protocol. The following month, he and his company sued the SEC, alleging that the subpoena had been improperly served and that the SEC had failed to keep its investigation confidential because Kwon had been served in person at a conference.

Early 2022 marked the launch of the Luna Foundation Guard (LFG), an organization that was tasked to create a forex reserve for the UST in case of a severe crisis in the peg. LFG stepped up as a significant and very public buyer of bitcoin, amassing a $3.5 billion stash in cryptocurrencies (mostly held in bitcoin) in its reserve.

On May 8, 2022, UST’s price deviated from the $1 peg and investors started to flee from Anchor, which was the main driver for UST demand. Steps to recover the peg proved to be short-lived, and UST lost its price peg on the week of May 9 again eventually falling to cents. Parallelly, UST’s collapse drove LUNC into a hyperinflationary cycle and the token’s price fell to cents.

Amid the collapse, the Terra blockchain was halted twice to avoid any governance attack.

As part of the efforts to revive the Terra ecosystem, the community voted to launch a new blockchain called Terra 2. That coin was released in late May 2022. The tokens were distributed to holders of the old LUNA tokens and to holders of UST stablecoins.

The old blockchain (Terra) remained intact, its native LUNA token was rebranded to luna classic (LUNC), and UST was kept in circulation.

Read less...
Sponsor LogoBuy crypto on a secure, trusted platform.
Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply. Don’t invest unless you’re prepared to lose all the money you invest.

Latest About Luna Classic

View All
CoinDesk 20 leaders (CoinDesk Indices)
SHIB's 106% Move Higher Led CoinDesk 20 Gainers Last Week: CoinDesk Indices Market Update

Bitcoin cash and ethereum classic also posted significant gains as all 20 cryptos in the gauge appreciated.

CoinDesk 20 leaders (CoinDesk Indices)
Terraform Labs co-founder Do Kwon (Terra)
Terra's LUNA Tokens Fall Steeply on Do Kwon's Alleged Arrest

Kwon was reportedly arrested in Montenegro earlier on Thursday.

Terraform Labs co-founder Do Kwon (Terra)
Jump Crypto President Kanav Kariya (Danny Nelson/CoinDesk)
Jump Crypto Is Unnamed Firm That Made $1.28B From Do Kwon’s Doomed Terra Ecosystem: Sources

A complaint by the SEC against Do Kwon and Terraform Labs revealed an unnamed trading firm helped Kwon restore UST’s $1 peg in 2021 in exchange for discounted LUNA tokens.

Jump Crypto President Kanav Kariya (Danny Nelson/CoinDesk)
Jesse Austin Campbell (LinkedIn)
Former Paxos Exec: Regulators Failed to Address Crypto Collapses, Now They’re Going After 'On-Ramps'

Jesse Austin Campbell, former head of portfolio management, says that “probably, the greatest mistake you could have made is to be an onshore, regulated company in the crypto...

Jesse Austin Campbell (LinkedIn)

Tim Beiko from the Ethereum Foundation, shares the Importance of the Dencun Upgrade, what are their concerns, and Ethereum's long-term scaling strategy. Read more...

CoinDesk Indices

View All
Top Indices including Luna Classic
Logo
Index nameTickerWeight24H

Bitcoin Calculator

Last Updated on 03/19/24 4:10 AM

CoinDesk’s Bitcoin and Cryptocurrency Calculator determines the exchange rates between major fiat currencies and cryptocurrencies – including BTC, BCH, ETH and XRP to USD, EUR, GBP, IDR and NGN – with up to six decimal places of accuracy. Conversion rates are based on CoinDesk’s Bitcoin Price Index and the price indices of other digital assets. World currency prices are based on rates obtained via Open Exchange Rates.

Market Analysis
Social Analysis