Judge Denies Terraform Labs' Motion to Dismiss SEC Lawsuit, Rejecting Ripple Ruling Precedent
First Mover Asia: Bitcoin Holds Steady at $30K as ETF Applicants Resubmit Applications
Bitcoin Futures Garner Record-Breaking Investments Amidst Terra's Demise
Terra Classic outperforms crypto market
On September 8, the token soared more than 250% month-to-date to hit $0.000594, its highest level ever. While Ether (ETH) only increased by 3.5% within the same time period and Bitcoin (BTC) fell by 4%.Despite its connection to the abandoned Terra (LUNA) coin, a $40 billion project that failed in May, the Terra Classic market saw gains. Since Terra Classic is merely a renamed version of the Terra project, analysts and investors have been dubious about it from the beginning.
However, in recent weeks, a flurry of fundamental events have persuaded traders to ignore these cautions and buy LUNC instead.
Staking service
The recent price surge for LUNC was sparked by the launch of a new staking service on the Terra Classic chain on August 27.Users have bet more than 610 billion LUNC with Terra Classic against its net supply of 6.9 trillion units, according to LuncStaking Bot. In other words, less than 9% of the whole supply of LUNC has been withdrawn from use.
Staking Terra Classic returns users with an annualized yield of 37.8%, ranking among the best payouts in the cryptocurrency sector, according to data from StakingRewards.Supply and staking of LUNC
— LUNC staking (@LuncStaking_Bot) September 8, 2022
SUPPLY
total: 6,903,660,538,201
STAKED
bonded: 533,102,702,962
unbonded: 77,003,374,763
STAKING RATIO
8.837%(bonded: 7.722%)
2022-09-08 17:30 UTC#LUNC
According to the figure below, the increased rewards may have significantly increased LUNC demand, causing the token's price to increase by more than 450% since the launch of the staking service.
LUNC token burn
To increase LUNC's scarcity in addition to staking, Terra Classic developers added a token-burning mechanism.At the start of September, a member of the Terra Classic community named Edward Kim suggested levying a 1.2% transaction fee on all LUNC on-chain transactions. A portion of the supply owned by LUNC would be permanently removed from circulation when the proceeds from this tax reached a dead address.
Terra Luna Classic (#LUNC) skyrockets >37,000% since its bottom after the Terra collapse
— Hailey LUNC ✳️ (@TheMoonHailey) September 7, 2022
This comes after a proposal to implement a 1.2% token burn tax on all transactions that will enable $LUNC to become a deflationary cryptocurrency.#LUNC ✨ #HaileyLUNC ✨ $LUNC ✨ pic.twitter.com/oIxI7tqVkW
Interestingly, there’s already a LUNC burning mechanism in place that has permanently removed over 3.6 billion tokens out of circulation, according to LUNC Burner.
Massive crash risk ahead
Nevertheless, several technical indicators suggest that the price rally for LUNC may soon experience a correction. Among these is its daily relative strength index (RSI), which on September 8 reached 90, a very overbought level usually preceded by a price fall.
Also, the recent LUNC gains are accompanied by lower volumes, suggesting traders are unconvinced about the price rally’s longevity.
First potential sign of blow-off top on $LUNC pic.twitter.com/Fn11FHevnZ
— Livercoin (@Livercoin) September 8, 2022
The author's thoughts and opinions alone, not necessarily those of Cointelegraph.com, are conveyed in this article. Every investment and trading action carries risk, therefore before making a choice, you should do your own study.
=======
