What is Terra Classic (LUNC)?

Terra Classic (LUNC) is a blockchain-based currency using fiat-pegged stablecoins to create stable global payment systems. The Terra document describes how it combines the stable nature of fiat currency with the resistance of Bitcoin to regulation.

You can conduct settlements quickly and affordably through it. The Terra Classic is a public, transparent, and decentralized protocol that utilizes proof-of-stake to facilitate convenient payment across the globe.

As opposed to other fiat-pegged cryptocurrencies, Terra Classic maintains its fiat peg by using an algorithm for managing the supply of stablecoins and determining demand.

There is a burning or minting process for Terra Classic (LUNC) that changes according to its demand for the coin to remain pegged.

Who Created Terra Classic (LUNC)?

Daniel Shin and Do Kwon launched Terra in 2018. Their vision was to accelerate the adoption of blockchain and cryptocurrency while emphasizing usability and scalability.

Terraform Labs, the creators of Terra Classic (LUNC), appointed Kwon as CEO. Before establishing Terra, Shin also cofounded Ticket Monster.

On the other hand, Kwon served as CEO of Anyfi, a company specializing in decentralized technologies. Furthermore, he has experience working for Apple and Microsoft as an engineer.

Terraform Labs, which developed Terra Classic, enjoys extensive partnerships and has a strong reputation in the Asia Pacific. It has allowed Terra 1.0 protocol to become a popular payment processing solution and increase mainstream adoption of blockchain technology.

How Does Terra Classic (LUNC) Work?

The Terra Classic (LUNC) uses the Cosmos SDK to implement the stake-based consensus protocol and the Tendermint protocol to implement its consensus algorithm.

Validators submit transaction blocks for approval, and then voters approve them twice. The native cryptocurrency of Terra 1.0, LUNC, is stackable and serves as the governance token. The primary objective of LUNC tokens is to regulate Terra’s stablecoin volatility.

Blockchain users can stake LUNC to validators that will record all transactions within Terra Classic in blocks and verify them. The reward for validators’ work comes from the fee collected from transactions in LUNC.

Terra Classic’s (LUNC) value may rise above the fiat peg as interest in the stablecoin increases. As a result, it will be necessary to burn more LUNC coins to mint stablecoins and stabilize prices.

Due to the increased burn rate, LUNC’s circulation decreases, and its price increases. When demand for stablecoins like Terra Classic rises, investing in them becomes even more worthwhile.

However, if LUNC demand falls, the price may fall from the fiat peg. In such a scenario, there is a need to burn more stablecoins, and more LUNCs get minted within the Terra Classic ecosystem.

Is Terra Classic (LUNC) a Good Investment?

Although Terra’s ecosystem is prevalent among Decentralized applications, especially in DeFi, it is unclear whether Terra Classic is likely to retain its popularity or not. It appears, however, that Terra Classic (LUNC) is a good investment at the moment.

As more and more leading projects commit to moving to Terra 2.0, Terra Classic may become more focused on building a global payment network powered by cryptocurrency.

Its evolution may lead Terra Classic in a new direction. The company’s developers seem to be developing new strategies for LUNC to appeal to investors.