#LUNC✅ #Binance The surge in the number of LUNC (Luna Classic) tokens during the 2022 Terra/Luna collapse was due to the implementation of a massive inflation mechanism as an attempt to stabilize the network.

Here's what happened:

UST Stablecoin Attack: The collapse began when the algorithm that maintained the peg of UST (the dollar-pegged stablecoin) to the dollar failed. This was due to a massive withdrawal of funds and loss of trust in the system.

Breakdown of the Algorithmic Mechanism: UST relied on an arbitrage system that involved burning and minting LUNA (which was later renamed LUNC after the network split). When the value of UST began to fall, a massive amount of LUNA was minted in an attempt to rebalance the price of the stablecoin. This drastically increased the supply of LUNA tokens. Runaway Inflation: In a matter of days, the supply of LUNA increased from hundreds of millions to trillions of tokens, resulting in hyperinflation. This massive creation of LUNA tokens destroyed the value of the token, reducing it to virtually zero.

Lack of Network Control: This inflation was caused by an attempt to save UST, but since trust had already been lost, traders dumped both UST and LUNA on the market, accelerating the collapse.

Rebranding and Forking: After the collapse, the Terra community voted to create a new blockchain, called Terra 2.0 (LUNA), while the original blockchain became known as Terra Classic (LUNC). The inflation of LUNC was a direct reflection of the collapse event and the loss of control in the algorithmic mechanism.