Terra LUNA vs Terra Classic: A Comparative Analysis

Introduction

There still remains the effect of the historical LUNA crash of 2022 in the crypto markets and its aftermath that left many investors and creators grappling with fear and uncertainty. To overcome these challenges and regain the position of Terra, Do Kwon founder introduced a fork- Terra 2.0 to restore the project, and the old chain was rebranded as Terra Classic. But the question remains, is Terra Classic the same as Terra Luna? And which one is a better investment option? 

In this article, we will understand Terra Classic and Terra Luna, compare them, and more so you can make a better decision and do your own research when investing in cryptos.

What is Terra Classic (LUNC)?

Terra Classic is the original Cosmos-based blockchain network of the Terra ecosystem that was launched back in 2018, it used to employ algorithmic-based stablecoins with fiat stability and blockchain network together to offer users a secure and cheap way of transaction settlement. It was released by Terraform Labs-a startup co-founded by Do Kwon and Daniel Shin.

Before we further compare Terra Classic and Terra 2.0, let’s understand what led to the creation of these two crypto versions.

Terra ecosystem once was one of the thriving blockchains worth more than $40 million, with its two native tokens, Terra LUNA (now LUNC) and TerraUSD (now TerraClassicUSD), among the top 10 cryptos in terms of market cap. Terra blockchain worked on a price balancing model of these two cryptos, where LUNA tokens were minted and burned to keep the price of UST stablecoin to a dollar peg.

On May 09, 2022, a big whale dumped many UST (TerraUSD) coins in the market, deviating stablecoin from its $1 peg. Now, as there were an excess amount of UST and LUNA coins available in the market, this created FOMO among investors, making them sell more UST coins, which resulted in further depeg losing over 70% of its value to $0.30 price. The Terra protocol algorithm, which was designed with a burn-mint mechanism for LUNA tokens to stabilize the UST price, caused a hyperinflation spiral by creating more than a trillion tokens to back UST, diminishing the value of LUNA from $80 to below a dollar- $0.10 and UST below a cent. Consequently, developers and projects working on the Terra ecosystem left it all abandoned, and there was no activity on blockchain for several days.

In the wake of this catastrophic crash, Do Kwon- founder of Terra blockchain, suggested a revival plan for the project on the Terra Developer forum, which was accepted by the majority of community members and validators, leading to the creation of blockchain Terra 2.0 and old blockchain was rebranded as Terra Classic with old native token renamed to LUNC as we know it today.

Latest news on Terra Classic

• Binance, the world’s largest centralized crypto exchange, has recently burned 2.65 billion LUNC (Terra Classic) tokens to represent its support to the old Terra ecosystem- Terra 2.0 and revive LUNC value back in the longer run. This was the 11th batch of LUNC burned by Binance, and to date, over 35.5 billion tokens have been burned by the crypto exchange.

📢 UPDATE: #Binance has burned 2.65 billion Terra Classic $LUNC tokens in its 11th burn round.

The total #LUNC tokens burned by Binance now exceed 35.5 billion, with the community’s burn surpassing 68 billion.

— BNB Swap (@BNBSwap) July 3, 2023

What is Terra (LUNA)?

In the restoration proposal of Terra, a hard fork blockchain of old Terra was created with improved functionalities. The hard fork- Terra LUNA, was launched on May 28, 2022, with native crypto inheriting the name LUNA and on the same day, previous holders of UST and LUNC received new LUNA tokens in the first round of airdrop token distribution.

The Terra 2.0 blockchain runs parallel with the old Terra Classic network and utilizes the Proof of Stake consensus mechanism. The validators must delegate LUNA tokens to become a validator node and contribute to the network by validating and confirming transactions. Terra 2.0 blockchain has around 130 validator nodes to secure the network, and it does not have a stablecoin mechanism like the older version.

Read More: Terra Luna vs Avalanche

Latest news on Terra LUNA

• There are several community developments and updates happening to the Terra ecosystem in May, including Prism and Carbon’s announcement to establish an Alliance with LUNA, the launch of the NFT marketplace- Necropolis by Back Bone Labs, and much more.

Discover everything that happened within the Terra ecosystem in May, including ecosystem and governance updates, new integrations and listings, media features, and community thread highlights🗞️https://t.co/cGKaEvq6QK

— Terra 🌍 Powered by LUNA 🌕 (@terra_money) June 26, 2023

Comparing Terra Classic vs Terra LUNA

Here’s a brief comparison of Terra LUNA and Terra Classic LUNC:

	Terra LUNA	Terra Classic
Launch Date	2022	2018
Founder	Do Kwon	Do Kwon
Token Price	$0.6514	$0.0000871
Market Cap	$200 million	$507 million
Circulating Supply	306.53 million	5.82 trillion
Max Supply	1 billion	6.9 trillion
Consensus Method	PoS	PoS

Key Differences between Terra LUNA vs Terra Classic

• LUNA is the native token of the new Terra 2.0 blockchain launched on May 28, 2022, while LUNC(previously LUNA) is the rebranded token of the old Terra Classic blockchain, which was launched back in 2018.
• LUNC experienced a dramatic drop in value when UST lost its dollar peg. The algorithm meant to stabilize UST caused it to lose almost 100% of its value. On the other hand, LUNA, the native token of the new blockchain- has its value established after the fork and subsequent airdrops.
• Terra 2.0 and LUNA token have cut ties with stablecoin UST after its hard fork, while UST coin still retains its identity as TerraClassic USD in the Terra Classic ecosystem.
• Terra Classic has implemented a tax burn policy that was proposed by a community member named Edward Kim. This policy charges a 1.2% fee on all on-chain USTC and LUNC transactions, with the aim of making LUNC a deflationary token, and the tax is burned by sending to a dead address to reduce the circulating supply of LUNC until it reaches a target of 10 billion tokens.
• The LUNA token of Terra 2.0 was created with a limited total supply of 1 billion tokens and has a circulating supply of 306.53 million. In contrast, LUNC has a maximum supply of 6.9 trillion tokens and a circulating supply of 5.82 trillion tokens as of July 02, 2023.

Read On: Tera Luna vs Polygon

Terra LUNA (LUNA) Price Prediction

• LUNA’s price today is running at $0.6549, with a rise of about 2.58% in the past 24 hours.  LUNA’s price trading volume in the past 24 hours is about $36 million, and its market cap is around $200 million as of July 02, 2023.
• LUNA price traded in a close range of $1.20-$1.46 for around two months before it broke down in May, dropping to a price of $0.46.
• If the bulls manage to pull LUNA’s price from its current trend, it might rise to $2 by the end of the year.

Terra Classic (LUNC) Price Prediction

• LUNC price today is running at $0.000087, with a rise of about 0.62% in the past 24 hours. LUNC’s price trading volume in the past 24 hours is about $31 million, and its market cap is around $508 million as of July 02, 2023.
• LUNC price showed a bit of recovery in the first month of the year, gaining around 40% price, but it soon started following a downtrend.
• Both ADX and RSI indicators are in a state of indecision, and if the LUNC price rises above its 50-day moving average, it might have positive movement in upcoming times.  

Know More: Terra Luna Classic Price Prediction

Should you buy LUNA or LUNC?

As we discussed, Terra Classic was once a flourishing ecosystem that it even surpassed by Binance Smart Chain to become one of the top 2 DeFi protocols. However, the Terra UST crash led to developers and investors panicking and losing their interest in the network; nevertheless, Terra Community is continuously working to revive its old ecosystem, and many web3 projects are supporting it in the process. 

Terra LUNA 2.0 is a recently launched hard fork, trying to overcome challenges and regain the trust of communities after that calamitous implosion. Several developers and DeFi protocols have already started to participate and build new projects on the network. It’s crucial to note that the crypto markets are highly volatile, and there is still uncertainty and fear surrounding both cryptos, which they’re trying to overcome. It’s dependent on the investor’s preference and risk appetite, which one is better to invest in, so always do thorough research and risk analysis to make an informed decision before investing in crypto markets. 

How to invest in Terra LUNA (LUNA) and Terra Classic (LUNC)?

Investing in Terra LUNA LUNA or Terra Classic LUNC is extremely simple, fast, and secure with the CoinDCX App. All you need to do is register on the platform. To register, follow the below-mentioned steps:

• Download CoinDCX App
• Register by entering your details.
• Complete KYC and verify your mobile and email.
• Once your profile is validated, add funds to your wallet.
•  Buy LUNA or LUNC.