What Is Terra Classic (LUNC)?

Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems. According to its white paper, Terra combines the price stability and wide adoption of fiat currencies with the censorship-resistance of Bitcoin (BTC) and offers fast and affordable settlements. Development on Terra began in January 2018, and its mainnet officially launched in April 2019. As of September 2021, it offers stablecoins pegged to the U.S. dollar, South Korean won, Mongolian tugrik and the International Monetary Fund's Special Drawing Rights basket of currencies — and it intends to roll out additional options. On May 28, 2022, the genesis block of the new chain was launched to conduct future transactions under the name Terra (LUNA), and the original Terra Chain was rebranded as Terra Classic. The original native token — LUNA has also been renamed as LUNA Classic (LUNC). Moreover, all network stablecoins (UST, KRT, EUT) have been renamed to Terra Classic stablecoins (USTC, KRTC, EUTC). There will be no Terra stablecoins on the new chain. There is a theory that the additional term “classic” is a reference to the Ethereum / Ethereum Classic split in 2017. According to CEO, Do Kwon, the collapse of UST in the spring of 2022 is the equivalent moment of the Ethereum’s DAO hack that took place in 2017.

What Is Luna Classic (LUNC)?

Luna Classic (LUNC) is the first native token of Terra blockchain released in August 2018. $LUNC existed before the launch of the new chain — now branded Terra (LUNA) — and works with the original code of the Terra ecosystem. The main function that the native token performed was to absorb the price deviation of the algorithmic stablecoin — $UST. The price of the UST stablecoin was pegged to the US dollar by minting and burning UST tokens to balance the supply and demand of the coin. In May 2022, UST lost its peg and collapsed. The UST stablecoin algorithm created trillions of LUNA tokens, fell into a hyperinflationary spiral, and reduced the value of the original LUNA token by 99%. Read:

The full breakdown of the Terra Crash What is the difference between Terra (LUNA) and Terra Classic (LUNC)?

Both versions of the token have the right to exist as a result of the implementation of a proposal called Terra Ecosystem Revival Plan 2. The essence of the plan is to split the current blockchain through forking, which created a new chain in the ecosystem, preserving the previous version. According to the recovery plan, the existing chain and token have been rebranded as Terra Classic. The new LUNA tokens were airdropped to existing holders of LUNA and UST before the depeg and subsequent crash occurred.