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LUNC, the token of the original Terra Luna Classic chain, rallied by over 49% ahead of the weekend. The token rose to a one-month high in anticipation that the brand may return with a new value proposition.
LUNC was one of the tokens to emerge as an alternative after the crash of Terra (LUNA). The project split into Terra 2.0 with its own LUNA token, while some of the community shifted to LUNC.
LUNC went vertical based on short-term hype | Source: Coingecko
The two tokens, LUNC and LUNA, are in competition for a potential comeback. LUNC rallied to $0.000040, while LUNA also traded at a one-month high at $0.09. Both assets signal a potential comeback for the brand, and have performed near-vertical rallies in the past 24 hours.
LUNC briefly passed the growth of LUNA, which is also trying to revive the brand.
Why did LUNC rise suddenly?
LUNC achieved a vertical rally due to exposure. During Binance Blockchain Week, a moderator wore an old Luna T-shirt, showcasing the now-defunct project.
Despite the crash of Terra, the brand remained, as well as the native token. Due to the resilience of crypto assets, LUNC and LUNA stuck around as memes, building communities that have proposed the idea of relaunching the protocol with better risk management.
The rise of LUNC and LUNA also coincided with a small rally for FTT, the native token of the bankrupt FTX exchange.
LUNC showed it is not a dead coin, trading with the highest volume level since January. Daily trading expanded by 10X, up to $128M in the past 24 hours, from a baseline level of around $10M. Visitors to the Terra Classic website also increased in the past day, following the token rally.
LUNC also reacted due to its concentrated trading with a highly active legacy pair on Binance. The asset has not been delisted, and the trading pair could quickly absorb the hype-based trading.
The token is yet to show if this rally is sustainable and the Terra Classic chain can offer value. Currently, the chain has limited DeFi value, standing below $1M, although users have been trying to revive TerraSwap, the leading DEX.
Is the LUNC rally sustainable?
Soon after reaching a one-month high, LUNC took a downturn. The token remains relatively illiquid and unknown beyond its community. LUNC has performed similar rallies in the past, mostly due to community hype. This time, LUNC increased its mindshare by 193% in the past day, although the metric is based on a very limited social media presence.
The Terra Classic chain is preparing for an upgrade that would make it another competitor in the DeFi space. However, it may take a long time before the chain rebuilds its liquidity.
More attention may go towards LUNC and LUNA as the sentencing of Terra’s founder, Do Kwon, is expected on December 11. The event may add to the hype, but Kwon will have no other connections to the project.
Prediction markets are heating up on the issue, with most traders expecting a 9-12 year sentencing.
