Luna Classic (LUNC) is the first native token of the Terra blockchain released in August 2018. $LUNC existed before the launch of the new token — now branded Terra (LUNA) — and works with the original code of the Terra ecosystem. ^[1][2]

The LUNA to LUNC rebrand was due to the collapse of the previous version in May 2022. ^[3][7]

Luna (LUNC) Crypto Crash

TerraUSD (UST) and LUNA were initially introduced as sister coins operating on the Terra blockchain, where UST functioned as an algorithmic stablecoin backed by the value of LUNA. ^[3]

On May 7, 2022, the price of TerraUSD (UST), the algorithmic stablecoin of the Terra network, dropped to $0.91 after $2 billion of UST was unstaked and liquidated, causing a decrease in its value from $1. This resulted in traders exchanging 90 cents worth of UST for $1 of Luna. The reason for the sudden unstaking of the $2 billion worth of UST is unknown. After a large amount of UST was dumped, the stablecoin started to depeg. ^[4]

Following the loss of its peg, UST experienced selling pressure from investors. Its price fluctuated between 30 cents and 50 cents during the week after the initial depegging, eventually settling at a consistent low below 20 cents. The market capitalization of UST, which stood at approximately $18 billion in early May, declined to $770 million by the end of May. ^[5]

As a result of this event, the circulating supply of Luna expanded from 345 million Luna to 3.47 billion Luna on May 12, 2022. Consequently, Luna was ultimately delisted from cryptocurrency exchanges, resulting in its loss of value. ^[3]

Luna Crypto Crash: The Aftermath & Rebrand

Following the market downturn, various crypto exchanges, including Binance, delisted Luna and UST trading pairs. Trading suspensions were also widely observed in the lead-up to the weekend. Furthermore, the planned listing of Luna on Coinbase, initially scheduled for launch by the end of June, was discreetly withdrawn. ^[4]

Do Kwon, CEO of Terra, published a recovery plan for Luna, which had a temporary effect on the overall sentiment. Luna briefly rose to $4.46, before dropping below the $1 mark once again. It has since plummeted below 1 cent. ^[4]

Luna was abandoned after the drop, with Terra launching a new chain and new coin - Luna 2.0^[6]. The old Luna was rebranded as Terra Classic known as LUNC^[2].

LUNA to LUNC Migration

On May 28, 2022, the genesis block of the new chain phoenix-1 was launched to conduct future transactions under the name Terra (LUNA), and the original Terra Chain was rebranded as Terra Classic for Luna Classic (LUNC). All Terra's stablecoins (UST, KRT, EUT) were renamed to Terra Classic stablecoins (USTC, KRTC, EUTC). ^[7]

Terra (LUNA) vs Terra Classic (LUNC)

Both versions of the token (LUNA & LUNC) exist as a result of the implementation of a proposal called Terra Ecosystem Revival Plan 2^[8]. The essence of the plan was to split the blockchain through forking, which created a new chain in the ecosystem, preserving the previous version. ^[2][1]

According to the recovery plan, the existing chain and token have been rebranded as Terra Classic. The new LUNA tokens were airdropped to existing holders of LUNA and UST before the depeg and subsequent crash occurred. ^[2]

KuCoin Elevates LUNC Tax Burn Rate

On May 18, 2023, KuCoin, a crypto exchange announced^[10] its decision to increase the tax burn rate of Terra Classic (LUNC) Network from 0.2% to 0.5%. The decision is a response to Proposal 11515^[12], endorsed by the Terra Classic (LUNC) community, which advocates for an increased tax burn for the Terra Classic network. ^[9][11]

KuCoin stated^[11] that it will boost the tax burn of both Terra Classic (LUNC) and Terra Classic USD (USTC) tokens concurrently with the implementation of the 0.5% tax burn at the Terra Classic block height of 12,902,399. ^[9][11]