The truth about #cripto LUNC is undoubtedly one of the most controversial and fascinating assets in the market.
Brief analysis of LUNC:
What is LUNC? The Ghost of the 2022 Collapse
First and foremost, it is crucial to understand that #LUNC is the original currency of the Terra network, which was previously called LUNA. It is the asset that was at the center of the historic collapse in May 2022, when its algorithmic stablecoin, UST (now USTC), lost its peg to the dollar. The algorithm, in a failed attempt to save UST, issued trillions of new LUNA tokens, hyperinflating the supply and driving its price to virtually zero.
After the disaster, a new blockchain (Terra 2.0) was created with a new LUNA token. The original chain, with its gigantic supply of tokens, was abandoned by the original developers but was kept alive by a community of investors and supporters, being rebranded as Terra Classic (LUNC).
The Investment Thesis: The Bet on Burning
Investing in LUNC today is betting on a single powerful narrative: the burning of tokens.
The Goal: The community, which now governs the network, has the main goal of drastically reducing the circulating supply of over 5.5 trillion tokens. The thesis is simple: with a much smaller supply, the price of each individual LUNC token will tend to rise.
The Mechanism: The main tool for this is a "burn tax" applied to all on-chain transactions. A small percentage of each transaction is permanently removed from circulation. Furthermore, large #exchanges like #Binance support the cause by burning a portion of the trading fees.
The Reality and Extreme Risks
Despite the community's dedication, a cold analysis reveals monumental challenges:
The Scale of the Challenge: Burning trillions of #tokens is a Herculean task. At the current burning rate, even with Binance's support, it would take decades, centuries, to reduce the supply to a level that could significantly impact the price. The goal of bringing LUNC to values like US$ 0.01 or US$ 1.00 is mathematically unrealistic in the near future.
