What is Terra (LUNA)? A beginner's guide
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Loading... - Oliver Smith
- 01 Nov 2022
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LUNA Classic (LUNC) is the original Terra LUNA coin left behind after the recent UST/Luna collapse and the establishment of a new Terra chain. Kwon's plan for recovery included the creation of a whole new chain on which future transactions would be conducted. The old chain was split into the LUNA Classic and the Terra chains. Terra will be the name of the new chain (known as LUNA 2.0), and LUNA Classic (LUNC) is the original Terra LUNA blockchain's native token.
The term “classic” is most likely a reference to the hard fork of Ethereum and Ethereum Classic that occurred after Ethereum's 2017 decentralized automated organization (DAO) breach. This appears to be another ploy to promote the UST crash as "Terra's DAO hack moment," as Kwon stated.
The old version of the Terra protocol was expanded to offer support for stablecoin developers to build Terra decentralized finance (DeFi) projects. The project consisted of two cryptocurrencies: Terra and LUNA. Terra was the stablecoin standard pegged to fiat and other currencies. For example, TerraUSD (UST) is tied to the United States dollar, while TerraKRW (KRT) is tied to the South Korean won.
The native token, Terra (LUNA) was the network’s staking and governance asset. Users stake LUNA to earn a place in governance and become validators and obtain rewards. Users can also burn LUNA to mint Terra’s UST token or one tied to their local fiat. However, it’s important to note that while these stablecoins are tied to the value of fiat, they’re not backed by fiat. Instead, the LUNA token was considered an algorithmic stablecoin. Read More...
