Terra projects began to tank soon after the news of Do Kwon’s arrest warrant became public. A new rally is underway for Terra’s old chain, which utilizes LUNC (Luna Classic) as its native token. It’s worth noting that LUNC was already performing well before Kwon’s warrant. The price of LUNC has risen 8.5% over the last 24 hours. According to the latest market data, LUNA is down 7.6%, and USTC is down 3%.
What’s Behind Terra Classic’s Pump?
Several individuals were surprised to see the old token return to the greens. The reasons, however, may not be so mysterious.
For example, online chatter may have influenced investor sentiment about LUNC’s independence from Terra. According to one Discord user, Terraform Labs has not interfered with the blockchain (TFL). However, interacting with the blockchain without using the command line necessitates using some TFL resources. Nevertheless, developers are currently working on becoming self-sufficient regarding these resources. The user emphasizes that while removing all TFL resources would be acceptable, it would cause inconvenience for some users.
Furthermore, the community appears to have approved Terra LUNC’s proposed burn tax. The new tax parameter will tax an additional 1.2% tax on on-chain activities. This additional tax will be burned, inflating LUNC prices even further. The burn tax, however, does not apply to off-chain activities such as those conducted on centralized exchanges (CEX).
The future performance of LUNC is entirely dependent on how investors perceive the project. Being disconnected from TFL gives it the advantage of not being concerned with the current set of events. However, if LUNC wants to gain people’s favour, it will need to do more than just levy a burning tax. More utility and use cases will be required for the project. The Terra crash in the summer of 2022 was one of the most historic financial crashes in history. Many compared the firm to the collapse of Lehman Brothers during the 2008 financial crisis.
As of the time of writing, LUNC is currently trading at $0.00026726