Speculative Luna Classic Best Seen as a Meme Coin

Speculative Luna Classic Best Seen as a Meme Coin

Source: Adobe/ChaosMaker

Speculative Luna Classic Best Seen as a Meme Coin

Speculative Luna Classic Best Seen as a Meme Coin

A number of the old Terra Classic chain Luna Classic (LUNC) tokens, which are now known as Terra Classic, are still in circulation and can be found on a number of exchanges. Does the Luna token still have a use in the new Terra chain, where the stablecoin terraUSD (UST) is trading far below its dollar peg?

In recent days, both old and new Luna tokens have been made available for trading on exchanges. Although traders have questioned the new Luna token’s aim, they have also suggested it has limited value and few genuine applications.

Darren Lau, the founder of the Daily Ape newsletter and a former analyst at crypto investment firm Spartan Group, said on Twitter last week, “What’s the value [proposition] for LUNA without UST.”?

According to trader and host of the Stacks Podcast Luke Martin, “the only incentive to acquire LUNA 2.0 is to qualify for the next airdrop of LUNA 3.0 once it goes to zero like LUNA 1.0.” Several other users concurred, with one declaring that he had never come across anyone who was “able to describe the use case of LUNA.”

According to Ben Caselin, the Head of Research and Strategy for crypto exchange AAX, the original Luna token doesn’t have much difference from the new one, and they’re both of minimal use to the average user. According to Caselin, these tokens are now “extremely speculative assets” with “questionable tokenomics and utility.”

According to him, comparing the worth of the two Luna tokens now “to the same logic that drives meme coins” is the best way to comprehend their current value.

There is no way Terra and its tokens will be like Ethereum Classic (ETC), the chain that has survived thanks to its own community of value-added users, the head of AAX’s research department said in an interview.

“Despite having the same name as Ethereum Classic, Luna Classic is not the same thing. Following the DAO attack, which prompted the intervention, the latter has continued to exist and saw trade activity in part because of a core of principled traders who initially disagreed with Ethereum’s hard fork,” Caselin added.

A “principle-driven token” is not Luna Classic, but a “object of speculation,” he said. Caselin further warned that the token’s low trading volume makes it subject to manipulation.

“It remains to be seen if either gains traction in the coming weeks and months and if the market will balance or not. We can’t call a recovery if existing Luna Classic investors are stuck with losses they can never recoup from,” the crypto researcher said.

A pricing oracle for Terra Classic was apparently abused by some malicious actors to drain cash from a number of synthetic asset pools on the DeFi platform Mirror Protocol by exploiting a pricing oracle mistake.

According to Terra researcher FatMan, “so far the attacker has drained almost [USD] 2 million and counting – the attack will get worse when markets open tomorrow until [the] dev team steps up and fixes the pricing oracle,” he stated last weekend.

Averting a worst-case scenario, Mirror Protocol disabled certain synthetic assets from being used as collateral on its platform, according to reports. About 12 hours after he first raised the alarm, FatMan tweeted to his 61,000 followers on Twitter, “Crisis averted.”

In the meantime, Caselin’s assertion that Luna Classic is now a very speculative asset looks to be correct based on the recent price trend.

To put it lightly, trading LUNC under its current moniker on the crypto exchange has been a wild ride for traders since May 29. There was a dramatic increase in price in the first two days, but it then fell back to its beginning price of USD 0.00008 on day three.

Speculative Luna Classic Best Seen as a Meme Coin As a result, drawing a comparison to a meme coin seems logical. This logic suggests that traders and investors would be better off treating token bets as a form of gambling rather than traditional investing based on underlying values.



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