Terra Classic is a decentralized and open-source proof-of-stake (PoS) blockchain platform with smart contract functionalities. The blockchain is designed to be highly scalable and cheap to use, courtesy of the novel concepts it adopts such as Mantlemint and Terrain. The Terra Classic blockchain has a native token with the ticker LUNC that powers the network.
LUNC was developed to function as a hedge against any deviation in the price of the blockchain’s algorithmic stablecoin, formerly called TerraUSD (UST). Following the collapse of the ecosystem in May 2022, TerraUSD was renamed TerraClassicUSD (USTC).
How Terra Classic (LUNC) Came To Be
LUNC was originally known as LUNA. Despite being rebranded last year, LUNC still has all the properties of the original coin, and also serves as a stabilizing mechanism for the stablecoin, TerraClassicUSD (USTC).
In other words, Terra Classic is the original Terra 1.0 native currency that was abandoned by Do Kwon and TerraForm Labs (TFL) following the launch of a new Terra chain, after the massive failure of UST and LUNA in May 2022.
Terra Classic (LUNC) was created in January 2018 by TFL CEO Do Kwon and co-founder Daniel Shin, but its mainnet was launched in 2019. The Terra Classic blockchain was created to achieve the singular vision of facilitating the mass adoption of cryptocurrencies by creating a digital asset that has a stable price against the world’s major fiat currency, the USD.
Terra blockchain founders believed that the stability of price, as well as adoption, is crucial in achieving mass adoption of cryptocurrency and blockchain solutions.
Accordingly, Do Kwon, co-founder and CEO of Singapore-based Terraform Labs, explained how Terra can turn the existing problem of crypto price instability into an opportunity to build money from the ground up.
The Terra Classic (LUNC) project worked perfectly for a few years and became one of the top 10 largest cryptocurrencies by market capitalization. Its ecosystem algorithmic stablecoin, now known as USTC, joined the league of the top 3 stablecoins in the world.
Unfortunately, due to several factors including poor management, the USTC stablecoin depegged, crashing the price of LUNC dramatically. This historic meltdown that wiped $40 billion out of the Terra ecosystem sent shockwaves all through the crypto industry.
Terra founder Do Kwon, who was recently sued by the SEC, developed a means to revive the blockchain. Kwon stated in his recovery plan that the Terra chain will undergo a hard fork and separate into two different chains with the new chain void of a stablecoin. The plan was approved by Terra validators on May 25, 2022.
Terra 2.0 was launched on May 28, 2022, with the name Terra (LUNA). Meanwhile, the original chain had its name changed to Terra Classic. Therefore, the Terra project is associated with two native tokens namely — Terra and LUNA.
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