Terra (LUNA) is a secondary token that powers the Terra blockchain. Terra aims to be the go-to decentralized stablecoin used throughout the globe for everyday purchases. As Terra 2.0 was released on May 28th, 2022, the old token got the name Terra Luna Classic (LUNC).


Luna classic (LUNC) was originally created to be the first Terra blockchain's native token under the name LUNA, launched in 2018.


Its role was to serve as a twin token to absorb any price deviation of the blockchain's algorithmic stablecoin, terraUSD (UST). UST was supposed to keep its price pegged to the U.S. dollar by creating (minting) and (destroying) burning UST tokens to balance the stablecoin's supply and demand at a $1 price peg. When UST lost its dollar peg and collapsed in May 2022, the token fell into a hyperinflationary spiral because the algorithm that was intended to back up UST created trillions of tokens, diminishing its value by almost 100%.


As a result, the token that was worth $119 in early April of 2022 fell below one cent by the end of May 2022.