Yesterday, the market value of Terra’s crypto, Luna Classic (LUC), took a small jump thanks to some good news that gives room for some hope.
Terra Classic is the new name given to the Terra ecosystem which imploded in May 2022 due to the failure of the UST stablecoin. Now, the stablecoin has also changed its name to USTC, although it is no longer pegged to the dollar, just like the Luna cryptocurrency which has become LUNC (Luna Classic).
They should not be confused with Terra 2.0, and its cryptocurrency LUNA, which are another project, not based on algorithmic stablecoins like the previous one.
News: the price of the crypto Terra, Luna Classic
Yesterday, all of a sudden, the price of LUNC rose from 0.159 mils to 0.176 mils, a small jump of 10% in just over three hours.
Even though the current price has simply returned in line with that of a week ago, it was 0.145 thousandths at the start of January, so in less than three weeks it has increased by 21%.
However, it remains almost 100% lower than it was in May 2020, before the implosion, so as of today it is still just a speculative token. There doesn’t seem to be a possibility on the horizon that it can even approach pre-collapse levels of $80, as those are tens of thousands of times higher.
However, the fact that the Terra Classic ecosystem from May 2022 has imploded does not mean that it has disappeared, nor that its evolution has stopped for good.
The latest news on the Terra Luna crypto ecosystem
The good news for the evolution of Terra Classic is that a few days ago Binance officially declared that it supports its latest update.
It is proposal 11242which was already approved on January 11 with 96% favorable votes.
On January 14, the update was implemented in the Terra Protocol, and this can be interpreted in two ways.
The first is the consideration that the development of the Terra Classic project continues. Now that the founders are gone creating Terra 2.0, the project is enjoying a new lease of life, even though the stablecoin it was previously based on remains imploded and likely unrecoverable.
The second is that Binance continues to support its evolution, abandoning that of Terra 2.0 instead.
Binance, the largest crypto exchange in the world, had supported the Terra/Luna project from the start, but had been very critical of its founders when UST imploded taking the entire ecosystem with it.
When the founders abandoned the old project to create a new one, called Terra 2.0, Binance indeed chose to continue supporting the original, even if it imploded, in order to accompany its evolution.
In fact, in 2022, starting in June, the market value of LUNC (Luna Classic) has increased a lot from the value it had fallen to during the May implosion, precisely because it seems that the project started to evolve again, while updating the damage of the implosion.
In June, the price had fallen as low as 0.046 mils, so it has recovered 282% since then.
Governance Proposal Approved and Implemented 11242 eliminates re-minting of part of the burnt LUNC tokens.
The text of the approved proposal states that it resets the seigniorage reward policy, effectively preventing burnt LUNCs from being re-minted.
It should be noted, however, that when this new policy was implemented on January 14, the price had gone from 0.172 to 0.193 thousandths in about ten hours, but immediately afterwards it fell back below 0.173 thousandths.
It may sound strange, but this is a classic speculative move based on news and the “buy the rumours, sell the information” strategy.
Much more interesting is the rise in price from 0.151 mil on January 3 to 0.172 mil on January 13, because it was precisely on January 4 that Proposition 11242 was filed.
Thus, the proposal seems to have been able to promote solid growth in the price of LUNC, while its implementation was only an opportunity for speculators. Not least because on January 10, when it was then clear that the proposal would be approved, the price rose again from 0.153 to 0.172 thousandths, that is, practically reaching the current level.
On the other hand, the brief fall of January 18 to 0.160 thousandths, immediately recovered yesterday with the rebound mentioned above, is curious.
As there are still just under 6 trillion LUNC tokens in circulation, most created during the May implosion, token burns are the only possible solution to try to get the project back on track.
Moreover, 13% have already been burned, whereas they were initially more than 6.8 billion. At the current rate, it may take a few more years before they more or less return to what they were, and no one is certain that during all this time the project will be able to move forward and survive.
Still, at the very least, the road traveled after the Founders spill looks a lot better than the one that led to the implosion in 2022.