The LUNC rise is fueled partly by the excitement surrounding Terra Classic’s new token-burning feature and staking service.
Since the beginning of September, LUNC has surpassed all other top-performing cryptocurrencies, increasing by about 100% just in the last week.
On September 8, the token soared more than 250% month-to-date to hit $0.000594, its highest level ever. While Ether (ETH) only increased by 3.5% within the same period, and Bitcoin (BTC) fell by 4%.
Despite its connection to the abandoned Terra (LUNA) coin, a $40 billion project that failed in May, the Terra Classic market saw gains. Since it is merely a renamed version of the Terra project, analysts and investors have been dubious about it from the beginning.
However, in recent weeks, a flurry of fundamental events has persuaded traders to ignore these cautions and buy LUNC instead.
Terra Classic Prices Going 250% In This September:
The recent price surge for LUNC was sparked by launching a new staking service on the Terra Classic chain on August 27.
Users have bet more than 610 billion LUNC using Terra Classic itself against a net supply of 6.9 trillion units, according to LuncStaking Bot. In other words, less than 9% of the whole supply of LUNC has been withdrawn from use.
Staking Terra Classic returns users with an annualized yield of 37.8%, ranking among the best payouts in the cryptocurrency sector, according to data from StakingRewards.
According to the figure below, the increased rewards may have significantly increased LUNC demand, causing the token’s price to increase by more than 450% since the launch of the staking service.
To increase LUNC’s scarcity in addition to staking, Terra Classic developers added a token-burning mechanism.
At the start of September, a member of the Terra Classic community named Edward Kim suggested levying a 1.2% transaction fee on all LUNC on-chain transactions. A portion of the supply owned by LUNC would be permanently removed from circulation when the proceeds from this tax reached a dead address.