Terra Classic (LUNC), the original token of the Terra project, has gained 64% over the past seven days, placing it as the best-performing weekly asset among the top 100 market capitalizations.
From April 24th to April 30th, the price of LUNC increased from $0.00004451 to $0.0000732, as shown in the following graph.
This price increase is related to a combination of reduced supply, more tokens locked in staking, and expectations for future network improvements.
In the last 7 days, 714,982,541 LUNCs were deleted. A total of 444.3 billion LUNCs have already been burned, representing 6.43% of the total supply.
Please note that these burns are not completely automatic and do not respond to a single mechanism.
In Terra Classic, writes come from a variety of sources. On the other hand, mechanisms such as taxes on transactions that allocate a portion to writes are implemented in networks. And on the other hand, Voluntary efforts by ecosystem actors, such as exchanges and validators, to regularly remove tokens.
For example, in the last month alone, Binance deleted approximately 55,699,000 LUNCs, according to data from LUNC Metrics.
In addition, another 931.644 billion LUNCs are locked in staking. This represents 14.42% of the total supply (estimated at 6.46 billion tokens) and means that the relevant portion of the asset cannot be sold immediately.
Both factors reduce the effective circulating supply. Due to this reduced availability of tokens, An upward trend is favored when demand increases or when the market expects projects to improve.
At the same time, networks advance with technology updates. The community has been voting on a proposal to update the core Terra Classic software (the “terrad” client) to version v4.0.1, with virtually unanimous support of 99.99%. The final results will be known on May 6th.
These types of proposals are part of the governance of the protocol and can introduce changes to the operation of the protocol. In this case, the update fixes errors found in previous versions, improves the staking system, optimizes interoperability with other networks, and updates technical tools for developers.
If implemented as planned, the network will temporarily stop at a certain block (height 28,486,158), estimated to be May 6, 2026. During that outage, verifiers must update their software to keep the network running with the new version.
Anyway, Weekly rebounds do not change the asset’s historic deterioration. As reported by CriptoNoticias, LUNC is 99% below its all-time high (ATH) of $116.1, set in April 2022, one month before the Terra ecosystem collapse.
Against this backdrop, the current rally should be viewed with caution. Terra’s collapse caused significant losses to investors and called into question the value of its tokens in the market.
LUNC’s utility was severely impacted following the collapse of the UST stablecoin, which was the axis of its operations within its original ecosystem. Since then, the asset has had no clear use case, and its movement has relied heavily on community efforts to continue driving efforts to maintain its value.
Therefore, while supply burning, staking, and technological improvements can drive speculative moves, It remains to be seen whether LUNC can sustain its recovery beyond the short term.
(Tag Translation) Altcoin
