Find out about Terra Classic (LUNC), it’s easy!

What is Terra Classic?

Terra Classic is the original blockchain of the Terra-Luna crypto project, renamed after the hard fork that separated it from the new Terra chain. Terra Classic was conceived as a blockchain for global and decentralised payments. It was later enriched by numerous other services of decentralised finance (DeFi) that are no longer used today. In particular, its protocol allows the issuance of algorithmic stablecoins. TerraClassicUSD (USTC), before the fork simply known as UST, is in fact based on Terra Classic. USTC was designed to keep the price pegged to the US dollar thanks to an algorithm based on the supply of LUNC, the cryptocurrency at the core of the Terra Classic blockchain, originally called LUNA.

Why follow Terra Classic? 

On paper, LUNC has retained its functions after the hard fork that distinguished it from LUNA. On Terra Classic it is needed to contribute to the blockchain as a validator, to participate in the governance of the project by voting on community proposals, and to stake. Staking consists of holding locked LUNC cryptos to receive periodical rewards. There are approximately 6.9 trillion LUNCs in circulation, precisely because of the event that triggered the hard fork of the Terra blockchain. The UST stablecoin algorithm generated billions of LUNA coins in an attempt to recover the $1 price, without success. The new Terra blockchain eliminated the UST stablecoin for this reason, and the LUNA coins mined during the ‘death spiral’ simply changed their name to LUNC. 

How was it created?

Terra Classic is the current name of the Terra blockchain developed by Terraform Labs, The South Korean company was founded in 2018 by Do Kwon and David Shin; the former is the CEO of Terraform Labs and has worked at both Microsoft and Apple. According to Do Kwon’s idea, Terra was intended to be a network for international payments based on stablecoins, so as to combine the popular adoption and stability of fiat currencies with the censorship resistance of cryptocurrencies. In May 2022, the price collapse of UST marked the failure of the initial project, which has survived under the name Terra Classic but lacks the value and community to support it. Terra’s original stablecoin and coin were renamed ‘Classic’ to distinguish them from the new versions supported by the hard fork.