- TerraClassicUSD (USTC) gained 300% in a week as plans of a bitcoin-backed revamp plan and a Binance perpetual contract listing unleashed a speculative frenzy.
- USTC and LUNC underpin the Terra ecosystem, which collapsed last May.
LUNC is up roughly 60% this week, including a nearly 20% rise over the past 24 hours, CoinDesk data shows. USTC, meanwhile, has almost quadrupled in price. For perspective, the USTC rally has only brought the price to $0.05 versus its original price peg of $1.
The developer team also revealed a few days ago that they are working on an airdrop plan for USTC and LUNC holders.
The recent developments unleashed a speculative frenzy around the token. Trading volume with USTC has exploded in the last few days, peaking at times above $1 billion in 24-hour activity, dwarfing the less than $10 million average earlier this month, CoinGecko data shows.
Remnants of Terra
Terra luna classic (LUNC) and USTC are remnants of the sister tokens that underpinned the once-huge, failed Terra ecosystem, developed by Terraform Labs and helmed by co-founder Do Kwon, who was arrested earlier this year. USTC was an algorithmic stablecoin, while LUNC – then named LUNA – was used to balance the stablecoin at a $1 peg. The design proved to be unsustainable and the tokens fell into a hyperinflationary death spiral last May, collapsing the whole multibillion-dollar Terra ecosystem in spectacular fashion.
The U.S. Securities and Exchange Commission (SEC) this February charged Terraform Labs and Kwon with "orchestrating a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin." Kwon was arrested in Montenegro with forged passports in March and last week a local court approved extraditing him to the U.S. or South Korea.
Soon after the collapse, developers deployed a new version of the Terra blockchain with a brand new native token called LUNA, consequently renaming the old blockchain to Terra Classic and the tokens to LUNC and USTC.
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