Terraform Labs is a South Korean-based organization founded in 2018 by Do Kwon, who is now recognized as the egotistical trash talker that caused a $40 billion crash. His motive was to create an enterprise from the ground up to incentivize the global use of cryptocurrencies. However, he managed to do the exact opposite. Kwon extensively trusted his vision, and his pride refused to recognize its faults.
Terra is gaining quite the recognition lately for the wrong reasons. Last May, the cryptocurrency endured a significant fall down that led the entire market to crash. Although, some still wonder whether Terra (LUNC) will ever regain its value. In my opinion, all signs point out that it will eventually cease to exist. Nevertheless, in this article, you’ll find the Terra Classic (LUNC) price prediction for 2022.
What Is Terra (LUNC)?
Terra aims to build a financial system that eliminates the use of third-party intermediaries and fiat currencies. It’s an open-source, public blockchain intended for algorithmic stablecoins. Its protocol consists of two tokens, Terra and LUNC (previously known as LUNA).
Terra is the blockchain’s stablecoin, designed to track the value of equivalent fiat currencies. Unlike Tether, Terra is not backed by any financial assets. It instead maintains its stability through algorithms. Whereas LUNC is the blockchain’s native utility token. It’s created for staking and mining purposes and is used for Terra’s governance model.
Terra’s two-token protocol is what creates equilibrium in its stablecoin’s supply and demand. For instance, if Terra is at a price higher than the dollar, its token’s demand is higher than its supply. Therefore, users are advised to burn their LUNC tokens and mint their Terra tokens. Thus, lowering its value and increasing its supply. Meanwhile, if Terra is at a lower price than the dollar, users are advised to mint their LUNC tokens and burn their Terra tokens. Thus, increasing its value and decreasing its supply.
Why Did Terra Crash?
The Terra protocol collapsed when a mysterious amount of USTC was dumped. Consequently, it began to lose its peg with the dollar. More USTC holders began to sell their tokens in a state of panic, leading USTC to crash further. In addition, a substantial amount of LUNC was minted to save the stablecoin. Yet, that ultimately led to its crash also. In hopes of preventing the stablecoin from depegging further, Terra deployed its $3.5 billion Bitcoin reserve to buy off Luna and USTC. However, this knock-off effect led Bitcoin to also lose its value.
The mysterious USTC dump comes after Terraform Labs announced a 20% interest rate for investments made on the Anchor protocol. Initially, the offer was supposed to provide only a 3.6% interest rate. Somehow, it was altered only a week before its introduction.
An employee working for Anchor Dev stated that Do Kwon was warned about the repercussions this would cause the Terra and Anchor ecosystems. Ultimately, many thought it was clear that Do Kwon was merely running a Ponzi scheme.
“I did not know this would go out with such a high-interest rate. Set to 20% just a week before the release,” said the Anchor employee, “I thought I was going to collapse from the beginning. (I designed it), but it collapsed 100%.”
The South Korean government is currently investigating Do Kwon for potential charges of fraud, tax evasion, and actively running a Ponzi scheme. Additionally, they’ve banned Terra employees from leaving the country until further notice.
Terra Classic (LUNC) Price History
LUNC opened 2020 at $0.23 and closed the year at $0.65, with a return of 182.6%. In 2021, LUNC opened at $0.64 and hit the $1 mark on January 26th. In only 3 months, LUNC’s price increased to $18.5, with a return of 1368%. On December 25th, it recorded its all-time high for 2021 at $98.1.
LUNC opened in 2022 at $91.36. Throughout one month, its price decreased to $52.03. It recorded its all-time high on April 5th at $119.18, with a return of 30.45% since its opening price. On May 9th, the altcoin’s price decreased to $32. On May 10th, it dropped some more to $17.5. Come May 11th, LUNC has once again hit the 1 dollar mark. By May 12th, the altcoin lost 100% of its value, pricing at $0.0041.
Terra Classic (LUNC) Live Price Analysis
According to CoinMarketCap, Terra Classic’s live price today is $0.00009406 with a 24hr trading volume of $368,696,293. It ranks at #212 in the current market with a live market capitalization of $641,092,851.
Terra Classic’s price went up 58.8% in the last 24 hours. It recorded its all-time high on April 5th, 2022, at $119.18. On May 13th, 2022, its all-time low was at $0.00001675. It has a circulating supply of 6,553,933,211,690 LUNC and a currently unknown maximum supply.
Terra Classic (LUNC) Price Prediction 2022
According to Digitalcoinprice, Terra Classic’s price prediction for 2022 will not surpass $1. Its price is expected to fluctuate between $0.000075 to $0.00009 for the next 6 months. Meanwhile, Coincodex’s price prediction for LUNC shows that it will oversee a 29.8% decrease in the next 30 days. Based on its forecast, it states that now is not a good time to buy LUNC.
Terra is not the first protocol to collapse in the crypto market, but it’s definitely the most significant. Many crypto speculators believed they were proven right, but many crypto enthusiasts now fear entering the market. To avoid the same mistake made by Terra investors, only invest in what you’re capable of. In addition, always ensure you’ve done enough research for the asset you’re investing in.
Sally is a student of International Business Management and is interested in topics related to blockchain technology. She is an author for gBlogo’s “Crypto World” column and provides insight on topics related to cryptocurrencies and NFTs.