The breakdown of the Terra ecosystem was undoubtedly one of the factors that caused the bitcoin market to implode. The algorithmic stablecoin created by Terraform Labs lost its peg with the U.S. dollar in May 2022, causing the old LUNA and UST tokens—now known as LUNC and USTC—to experience a steep decline.
Terra left behind more than just a few losers in the cryptocurrency market. The massive crash delivered trillions of units of cryptocurrency to the market in addition to producing a new token and transforming the old one into Terra Classic.
More and more LUNC tokens were produced to keep the Terra Classic peg, which caused the price of the altcoin to drop from $68 on May 7 to just $0.0001 on May 13.
Additionally, Terra Classic’s supply was at an all-time low of 346 million tokens on April 7, 2022. The total number of circulating tokens for the alternative currency rose to 6.9 trillion after the May catastrophe.
Has Terra Classic Family Of Devalued Tokens?
LUNC has joined the family of devalued tokens as a result of a falling price and an excessive supply. People continue to have faith in an altcoin’s recovery, nevertheless, because of their drive for money and the investors who keep placing bets on inexpensive tokens in the hopes of becoming wealthy.
Is it possible that LUNC would soar once more and turn investors become millionaires in a market that emphasizes assets like Shiba Inu? Some people believe that burning tokens is a positive response to this question.
Burning a token involves permanently removing it from circulation and reducing its supply. Burning tokens primarily aims to create scarcity, which can lead to asset appreciation.
The burn may exert additional pressure on the price of a token to rise if demand for that asset rises. The most competitive market, however, demonstrates that this is not a differentiator for a higher capitalization on its own.
Of course, it is important to take into account the new wealth factor in a positive market, which is always the case. The introduction of a low-cost new token might help Terra Classic maintain its position outside of the spotlight and the burns continue to have little impact on the altcoin’s price. News on Terra