Still alive: what happens to the Terra Classic (LUNC) project
The current situation with Terra Classic
Terra Classic cryptocurrency continues to exist in the crypto market even though the Terraform Labs team behind the project's development abandoned it, creating a new Terra token (LUNA) and distributing it among LUNC and USTC holders.
The split resulted in two independent ecosystems — Terra 2.0, which became the main blockchain platform, and Terra Classic, maintained by the project's community of supporters. Terra Classic is the original platform created initially by Terraform Labs, just as Ethereum Classic represents the original blockchain that continued to operate after the 2016 fork.
An attempt to revitalize the Terra Classic ecosystem
In June 2024, a development team known as Six Samurai put forward a proposal to the community that aims to revitalize the Terra Classic ecosystem. For this purpose, the team requested $116,000, stating that LUNC "has infinite growth potential."
According to the Six Samurai developers, they would upgrade the Terra Classic blockchain by reducing the synchronization time between nodes, thereby speeding up the network. Among other proposals were:
- Launch of the test network (testnet);
- Transition to Columbus-6, the next blockchain update. As of November 2024, the latest update that makes the current Terra Classic compatible with other blockchains is Columbus-5;
- Developer rewards program.
However, the Terra Classic community turned down a proposal from the developers at Six Samurai, vetoing their request - this resulted from a vote in which the team requested a budget to update the blockchain.
Moreover, the community rejected Six Samurai's proposal not for ideological reasons but because of a lack of funds in Terra Classic's reserve fund.
Market data and issue of Terra Classic
Judging by market data, the Terra Classic project continues to stay afloat: as of November 2024, the capitalization of LUNC is about $645 million; according to this indicator, the asset occupies 123rd place in the overall ranking of cryptocurrencies.
In November 2024, after a secret meeting between former Binance head Changpeng Zhao and representatives of Terraform Labs, it was decided to burn 1 billion LUNC and USTC each. However, it's worth noting that 1 billion LUNC is only 0.01% of the existing token issuance. Despite this, after the news of the token burning, the price of LUNC resumed its growth, with the cryptocurrency's exchange rate rising more than 70% to $0.00011 since July. At the same time, nearly 390 billion LUNC tokens have been burned over the past two years.
Over the past year, the value of the LUNC cryptocurrency has increased by more than 30%. However, during this period, the price of Terra Classic reached $0.0002 and $0.00025, reaching a two-year high.
In addition, the Terra Classic network tried to create a kind of Tax2Gas taxation mechanism to reduce the LUNC issue. However, the implementation turned out to be quite complicated. Therefore, the OrbitLabs team proposed an alternative — a "writeback" mechanism. Its essence is that in each transaction, a small amount of LUNC tokens will be debited before the cryptocurrency reaches the recipient's wallet.
What does the future hold for Terra Classic?
Even though Terra Classic is managed by the community and the current development team, uncertainty reigns around the project. This is because Terraform Labs, the company managing Terra 2.0, is preparing to liquidate and hand over the project to the community. As a result, the future of the Terra Classic and Terra 2.0 ecosystems will be in the hands of the Terra community.
Meanwhile, the community-driven Terra Classic Foundation has decided to use 50% of trading commissions to buy back and burn LUNC tokens to reduce the number of tokens in circulation. This move increases the chances of reviving the Terra Classic project.