LUNA Classic (LUNC) is up 70% since its Aug. 20 low after plans to revitalize the ailing network were implemented.
The purpose of the original Terra Luna token was to absorb price deviations of the UST stablecoin. But after UST’s deprecation in May, Terra Luna has lost over 99.9% of its value.
After the rebrand, in an attempt to distance itself from the past, and with the recent addition of new staking and token burning features, it’s clear the developers are taking active steps to win back investors.
LUNA Classic Analysis
After problems with the Terra chain, founder Do Kwon’s proposal to split the chain and create Terra LUNA was accepted by the community. The first LUNA Genesis block was launched on May 28th.
Meanwhile, the existing Terra chain has been renamed LUNA Classic (LUNC) and works with the original code of the Terra ecosystem. But more importantly, it has been given to the community for their development and management.
Although Do Kwon appears to have retired, LUNA Classic still carries the burden of what happened in the past. And, rightly or wrongly, it is associated with that past.
However, recent price action suggests that investors are willing to forgive and move on. Over the past 30 days, LUNC is up 54% in value and up 70% from the local bottom of Aug. 19.
Although the current price is still fractions of the all-time high, the revival plan seems to be catching the interest of the investment community.
How will LUNA Classic attract new investors?
Token staking went live as part of LUNC’s v22 network upgrade. According to @LuncStaking_Bot’s latest post on Aug. 30, over 402 billion tokens have been staked, which is almost 6% of supply.
When staking went live on August 27, @LuncStaking_Bot’s first update showed that 182 billion tokens, or 2.6% of the supply, were staked – meaning token holders had increased their staking by 120% in three days.
Delivery and staking by LUNC
Total: 6,904,261,205,445
Insert: 402.024.010.299
Clock/Total: 5.823%
2022-08-30 12:20 UTC#LUNC #USTC #UST$LUNC $USTC $UST
— LUNC staking (@LuncStaking_Bot) August 30, 2022
According to Staking Rewards, the average annualized reward rate is 37.8%, which is among the highest staking payouts available. Still, unsustainable returns, particularly during periods of tight liquidity, remain an area of caution.
In addition, developers introduced token burning to increase scarcity. The LUNC Burner website shows that over 3 billion LUNC tokens have been retired to date.
Posted in: Terra, Analysis
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