TerraClassicUSD (USTC) Climbs 800% in 1 Week -- What’s Going On?
KEY POINTS
- After Terra lost its peg and its value, a hard fork was announced to attempt a fresh start.
- Up until just 10 days ago, TerraClassicUSD was virtually worthless, but it suddenly spiked almost 800% in value.
- StarShip metaverse will be accepting LUNC as payment with a 1.2% profit burn feature.
LUNA Classic will now be accepted as payment in the StarShip ecosystem, giving it value for the first time in a bit.
Lately, it seems that there is never a dull moment in the Terra/LUNA ecosystem. Last month, the crypto world watched in horror when Terra lost its dollar peg. Terra was a stablecoin, but instead of being stabilized by a fiat currency, it was backed by a sister cryptocurrency: LUNA. Terra being de-pegged forced LUNA to mint trillions of coins to maintain the ratio. And with that sudden, massive flush of supply, the value of each of the coins plummeted, causing them to lose over 99% of their value. The result was that both of the coins were rendered virtually worthless and billions of dollars were lost.
The recovery plan
Following this event, some investors expected that the excess LUNA would be burned to try to level out and restabilize. But instead of doing that, Terra Labs announced that they would be doing a hard fork, calling the original token TerraClassicUSD LUNA Classic (LUNC) and creating new tokens, Terra 2.0 and LUNA, which would be on a new blockchain running parallel to the old without a shared history. This was launched on May 28, following a governance vote.
The new plan didn't seem to make a difference at first. On June 19, the price of TerraClassic was $0.006, which is extremely low. But suddenly in this past week, the coin has climbed almost 800%, reaching as high as $0.089 earlier today. Investors and observers alike are curious about the massive spike, which could be from a few causes.
StarShip to the rescue
One of these could be the announcement by StarShip that it would begin accepting Luna Classic as payment, finally giving these tokens a reason to live after losing their stablecoin status. StarShip is a blockchain tech metaverse company that includes an NFT game and a centralized exchange (CEXy.Finance), among other things. The company made the partnership official on Twitter saying, "We're proud to announce that $LUNC will be Accepted as Payment within StarShip Universe, with a 1.2% Profit Burn as voted on by the community!"
The profit burn "tax" is key, as it will start to reduce the supply of circulating tokens, which will then cause the value to return.
Keep up with all the latest cryptocurrency news and happenings with Motley Fool Money.
Our Research Expert
Katie Clinebell is a freelance content creator and digital marketing strategist for FinTech, blockchain, and crypto brands. She has created award-winning campaigns for Snapple and Tai Pei Frozen Asian Food and received an Adobe Academic Achievement Award for content about Olympic athletes.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands. Terms may apply to offers listed on this page.