The price of Terra Luna Classic (LUNC) and TerraClassicUSD (USTC) experienced a surge on Saturday, May 11th, following news that the Luna Foundation Guard (LFG) had removed a significant amount of tokens from its wallet address. However, the price increases were short-lived as further details emerged regarding the nature of the action.
LFG Wallet Adjustment Reduces Reported Circulating Supply
An update from the Terra Classic community indicated that 1.85 billion USTC and 222 million LUNC tokens had been removed from the Luna Foundation Guard’s wallet address (terra1gr0xesnseevzt3h4nxr64sh5gk4dwrwgszx3nw). This address had been inactive for nearly two years.
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As a result of this adjustment, the reported circulating supply of USTC dropped to approximately 7.1 billion. It’s important to clarify that these figures represent adjustments within the LFG’s internal holdings, not the actual burning of tokens.
Crypto assets held by organizations like foundations and treasuries are generally not considered part of the circulating supply, especially if they are locked away through smart contracts or legal agreements. CoinMarketCap, a leading cryptocurrency data provider, defines circulating supply as “assets that are readily available for trading on the public market.”
Initial Price Surge Followed by Correction
The news of the LFG wallet adjustment initially sparked excitement within the Terra Classic community. The perceived decrease in circulating supply led to increased buying activity, pushing the price of LUNC up over 10% and USTC up by 18% within a few hours.
However, as the details of the adjustment became clearer, the market reaction reversed. Investors understood that the tokens were not being burned, but their status within the LFG’s holdings was being reclassified. This resulted in a correction, with both LUNC and USTC prices returning to their pre-adjustment levels.
Current Market Status for LUNC and USTC
At the time of writing (May 13th), LUNC was trading at approximately $0.0001046, representing a 0.01% increase over the past 24 hours. The 24-hour trading range for LUNC is $0.0001020 to $0.0001129.
USTC is trading at $0.0222, reflecting a 5% rise in 24 hours. Its 24-hour trading range sits between $0.0215 and $0.0251.
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Transparency and Community Engagement
While the initial price movements were due to a misunderstanding, the episode highlights the importance of clear communication within the crypto space.
Moving forward, organizations like the Luna Foundation Guard must maintain transparency regarding their actions and holdings to avoid similar market fluctuations based on misinterpretations.
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