Terra Classic (LUNC) has been the most prominent altcoin on the crypto market for the past seven days. That is because it went through a high of 21% in that period. But what motivated the cryptocurrency to grow so much?
Terra Classic is one of the cryptos that got the most attention in 2022, but in a negative way, for being involved in one of the biggest scandals in the history of the blockchain market. In a matter of hours, the former LUNA went from $119.18 to less than $0.01.
This drop came as a result of billions of tokens being created to hold the peg loss of USTC, Terraform Labs' algorithmic stablecoin. Unfortunately for token holders of Do Kwon's empire, this attempt failed, and both altcoins lost almost all of their capitalization.
This has brought a great deal of distrust to the crypto market toward altcoins and, in particular, Terra Classic. However, some profit-loving investors remain confident and can earn income from the highs that LUNC goes through at times.
In early October, for example, Terra Classic experienced a 22% rise in seven days because of Binance's claiming of all fees from LUNC trades between Sep. 21 and Oct. 1.
According to the crypto exchange, about $1.8 billion in tokens were burned. This was equivalent to the amount of 5.8 billion LUNC at the time.
But what is behind current LUNC increase?
One of the main catalysts of altcoin's current growth has been Binance. The leading crypto exchange announced the completion of the second round of airdrops for LUNC and USTC holders.
As one of the biggest players in this industry, investors look favorably on Binance's steps toward LUNC, as it shows support for the project, even after the crash that occurred in May.
Furthermore, proposal 10,983 was repealed by the altcoin community. In short, the suggestion had a focus on increasing the community pool from 10% to 50%. In addition, it would reduce the burn tax to 0.2%.
While this proposal could help Terra Classic get more funding, it could steer Binance away from the burns, which is key to getting LUNC out of circulation. This worried the community that decided to vote for the approval of proposal 11.111, which repealed the previous recommendation.
What is expected for Terra Classic from now on?
Despite the impressive rise, it is important to highlight that the cryptocurrency has lost confidence in the market by losing 100% of its all-time high seen in April 2022. Furthermore, Terra Classic has no real use case.
Everything the altcoin does is already present on other cryptocurrencies. Token burns prove ineffective in pricing altcoins, and the BNB story proves this.
In this sense, LUNC proves to be one of the most dangerous cryptos for the new investor and one of the best bets for the more experienced investor who is just looking to profit off of announcements surrounding the altcoin.