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Terra luna classic

Terra Luna Classic (LUNC)


Terra (LUNA) is the native staking token of the Terra protocol, utilized for governance and mining. Users stake LUNA with validators who record and verify blockchain transactions in return for rewards from transaction fees.

The relaunch of LUNA

In May 2022, the LUNA token was relaunched following the previous version's transition to LUNA Classic (LUNC).

TerraUSD and LUNA

The relationship between TerraUSD and LUNA

Initially, TerraUSD (UST) and LUNA functioned as sister coins on the Terra blockchain. UST was an algorithmic stablecoin, with its value supported by LUNA.

terra-luna-classic background
Ticker LUNC
Category Smart Contract Platform
Website https://terra.money
Twitter @terra_money
Telegram TerraLunaChat
Reddit https://www.reddit.com/r/terraluna/

Impact on the market

On May 7, 2022, TerraUSD experienced a significant value drop after a large volume of UST was unstaked and liquidated. This event led to an increase in LUNA's circulating supply, impacting its market presence.

Aftermath of the LUNA changes

Following these events, several crypto exchanges, including Binance, delisted LUNA and UST pairings. A planned listing on Coinbase was postponed. Terra's CEO, Do Kwon, introduced a recovery plan, leading to the introduction of a new chain and coin, Luna 2.0. The original LUNA became Terra Classic (LUNC).

The emergence of Luna 2.0

Launch of Terra 2.0

On May 28, 2022, Terra 2.0 was launched, introducing a new form of the blockchain and LUNA cryptocurrency. This version, known as Luna 2.0, was distributed to holders of the previous version.

Airdrop distribution details

The Luna 2.0 airdrop aimed to compensate holders of the original coin. Eligibility was determined by the type, amount, and duration of tokens held. The Genesis airdrop occurred on May 27, 2022, with a total supply of 1 billion tokens allocated to various groups.

Tokenomics of Luna 2.0

The protocol burns LUNA tokens if the supply exceeds 1 billion, maintaining equilibrium. New LUNA tokens are minted to stabilize Terra stablecoins. LUNA was initially sold in a private token sale in August 2018, raising $32 million.

Utility and staking of LUNA

The utility of LUNA

LUNA serves multiple purposes, including mining Terra transactions through staking, ensuring price stability of Terra stablecoins, incentivizing blockchain validators, and providing collateral for stabilizing Terra-based stablecoins.

Staking process

Staking involves bonding LUNA to a validator for rewards. The Terra protocol allows the top 130 validators to participate in consensus, determined by their stake. Validators with larger stakes propose new blocks more frequently, earning more rewards.

Phases of LUNA

LUNA exists in three phases:

  • Unbonded: Freely traded and not staked to a validator.
  • Bonded: Staked to a validator, accruing rewards.
  • Unbonding: In the process of becoming unbonded, taking 21 days and not accruing rewards.