LUNC, USTC Price In Freefall As L1JTF Pinpoints Cap Issue

Terra Classic’s community is in the middle of a heated debate surrounding the LUNC cap.

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  • L1JTF has recently completed the code work for core v2.2.0.
  • The upgrade hopes to minimize Terra Classic’s upkeep.
  • Both USTC & LUNC continue trading down since last month.

Vinh Nguyen, the leading developer of Layer-1 Joint Task Force (L1JTF), recently published the report for the second sprint of the year. In the latest report, L1JTF team shared details about the release of core v2.2.0 first version (rc1), as well as the investigation of $LUNC cap, which is exposing the embattled Terra Classic community to yet another high risk.

LUNC Cap: Another Hazard For Terra’s Tokenomics?

Currently, Terra Luna Classic’s max supply is set to infinity, while the total supply stands at 6,838,176,955,772. Ultimately, this means that more Terra Luna Classic (LUNC) can be minted, but many crypto investors are using this as the main argument why $LUNC burns don’t have a visible positive impact on $LUNC & $USTC prices. 

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Going into further detail on the $LUNC cap item proposed at the beginning of the year, L1JTF deems it a huge risk to the tokenomics of Terra’s ecosystem. Here are the reasons laid out by L1JTF in the update on Commonwealth, the community’s governance platform:

  1. No more $LUNC will be minted on the chain in every block. That erases the main source of income for Terra Classic’s validators, delegators, and even the community pool.
  2. USTC swap strategy to re-peg the malfunctioning stablecoin won’t include LUNC. Crypto traders would no longer receive a $LUNC airdrop when swapping Terra Classic USD (USTC).

Ultimately, Layer-1 Joint Task Force representatives are willing to collaborate with the USTC Quant Team on the matter, but the circulating supply of $USTC has to be drastically reduced in order for the re-peg plan to make serious progress.

At press time, the #98 by global crypto market cap Terra Luna Classic (LUNC) trades at $0.00006364, according to CoinGecko. 6.7% down in the last 7 days, $LUNC has been hanging on to the edge of the cliff, close to falling out of the TOP 100 by cryptocurrency global market cap with a $369 million market capitalization.

The defective stablecoin Terra Classic USD (USTC) has plunged by 20% in the last 30 days, as Terra Classic whales dumped massive amounts of $LUNC & $USTC when FireBlocks, the New York-headquartered blockchain security service company, announced the upcoming delisting of both Terra Classic’s coins.

On the Flipside

  • There’s a huge difference of opinion regarding the capping of $LUNC tokens, as well as inner conflict between the USTC Quant Team and Layer-1 Joint Task Force.
  • Popular LUNC YouTuber Happy Catty Crypto called out L1JTF to be compromised. By this theory, the devs allegedly concealed important information regarding Terra Classic’s parity to get funding.

Why This Matters

Terra Classic’s revitalization efforts indicate that Terra’s blockchain still has high demand, despite the horrendous financial fiasco in 2022.

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Tadas Klimasevskis

Tadas Klimaševskis is a Lithuanian journalist at DailyCoin, specializing in covering the lighter side of the crypto industry such as memecoins and pop culture in the metaverse. He has experience as a music artist, English language teacher, and freelance writer, and uses his creative writing skills to summarize valuable information in his work. He is also a strong believer in the potential of blockchain and spends his free time listening to music, traveling, and watching basketball games.