The abrupt collapse of the Terra ecosystem in May 2022 was a ‘black swan’ event, with damaging consequences for its investors and the whole cryptocurrency community.
Since the collapse of Terra, the cryptocurrency market has been in turmoil, with major coins like Bitcoin (BTC), Ethereum (ETH) losing value.
Before the crisis, UST, Terra’s stablecoin, had a market value of more than $18bn. After the Terra network crash, Do Kwon, who created the blockchain technology firm Terraform Labs that developed the Terra ecosystem, designed a plan to revive the project.
The plan saw a hard fork and the creation of a new chain, Terra (LUNA). The old Terra Chain was renamed Terra Classic (LUNC).
Will LUNC bounce back? Here we take a look at the latest news and other factors shaping the LUNC/USD forecast.
What is LUNC/USD?
The Terra network, a DeFi project, and its co-founder and creator Do Kwon rose to prominence in the cryptocurrency market in May 2022.
The price of TerraUSD (UST), an algorithmic stablecoin, started to de-peg from the US dollar on 7 May and fell to $0.35 on 9 May.
According to CoinMarketCap, its sister token, LUNA, which was meant to stabilise UST’s price in a dual-token system, fell from $86.7 on 4 May to $0.00001675 on 13 May, a record low.
Do Kwon submitted the “Terra Ecosystem Revival Plan” on Terra’s development forum. He suggested constructing a new blockchain via a hard fork and distributing the new tokens to community members in proportion to their holdings of UST and LUNA.
Validators on the network accepted the proposal and two weeks later the new Terra blockchain was revealed. The name of the new token was LUNA. The old chain was renamed Terra Classic (LUNC).
LUNC, which uses a proof-of-stake (PoS) consensus mechanism, served as the old network’s native governance and utility token.
LUNC/USD price history
According to ICO Drops, LUNC’s initial coin offering (ICO) concluded…
