LUNA 2.0 vs LUNA Classic: Which Proves to Be The Better Choice?

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The community supported a plan to rebuild the project when the Terra network and tokens imploded, leaving many people perplexed by the new identities. Here’s a breakdown of the two Terra blockchains and which tokens are worth investing in.

Terra, a once-billion-dollar digital asset ecosystem, collapsed in May 2022, possibly the biggest token crash in crypto history. Within a week, the price of UST, the world’s largest algorithmic stablecoin, and its twin token LUNA, which was supposed to maintain UST’s price, plummeted to nearly nothing. 

UST and LUNA were both among the top ten cryptocurrencies before their collapse. During the turmoil, the Terra blockchain was forced to pause twice. Luna and UST have been down for a month now. During that period, a plan to keep LUNA alive through a bifurcation has emerged. LUNA 2.0 and LUNA Classic were born from the latter.

Many investors who experienced significant losses due to the LUNA disaster have distanced themselves from the endeavor. Nevertheless, as LUNA emerges from the ashes, some pursue redemption and some seek to make a profit. Whatever side you’re on, knowing the difference between LUNA 2.0 and LUNA Classic is critical.

Everything You Need to Know About LUNA 2.0 vs. LUNA Classic

The Terra fork was designed to sustain the network. The fork ensured that the original LUNA, now known as LUNA Classic or LUNC, would continue to exist. However, due to excessive minting to maintain the UST’s peg, the LUNA’s supply was inflated to a circulating circulation of around 6.5 trillion coins. It also led to the development of LUNA 2.0, which has a circulating supply of only 210 million LUNA.

There is no ‘mint and burn’ mechanism in place for LUNA 2.0. Meanwhile, as part of the attempt to avoid future attacks, a proposition is known as ‘Prop 29’ was introduced to restrict the functioning of the Anchor protocol.

Due to its limited circulating supply and increased trading volumes, LUNA 2.0 appears to be more prevalent on paper. For example, in the last 24 hours, it generated $398 million in daily trading volume, while LUNC generated $193.7 million.

Will LUNC’s Trump Card Help it to Sustain?

Since its debut, LUNA 2.0 has lost more than 80% of its value. The LUNC drop in May, on the other hand, provided an opportunity to buy at rock-bottom rates. The only drawback was that recovery was unlikely, especially given the vastly increased supply. The community of LUNC, on the other hand, recently enacted PROP 3568, which permits the burning of 653 billion LUNC.

The bullish price behavior of LUNC appears to be supported by on-chain indicators. On the 7th of June, for example, the supply held by whales fell to 46.28 %, the lowest amount of the month. It has, however, risen to 46.55% since then. This shows that whales are gathering to profit from the supply shortage.

This week, LUNC’s social volume and social dominance both, saw significant increases in activity. This is partly due to increased activity around cryptocurrency, such as recovery ideas. In addition, according to LUNA 2.0, Whale supply has also increased, from 46.33% on the 7th of June to 46.55 % at the present time.

Is Luna 2.0 a Safe Choice?

Even after the burn, LUNC will have trillions in circulating supply. In terms of price, there isn’t likely to be much of a shift. There’s no way of knowing what will happen next with Terraform Labs and its cryptocurrencies after so much has happened in the first half of 2022. 

Will investors’ faith in the market recover? Will there be a significant increase in the value of Luna 2.0? We can only wait and observe how Luna 2.0 succeeds in this highly competitive and volatile industry for the time being.

Source: https://coinpedia.org/altcoin/luna-2-0-vs-luna-classic-which-proves-to-be-the-better-choice/