Following the collapse of the Terra Classic ecosystem, the supply of LUNC tokens became massively inflated, leading to a monumental price crash. This article will discuss, "What caused the LUNC supply to be hyperinflated?" Let's get started.
What caused the LUNC supply to be hyperinflated?
Luna Classic is a decentralized, consensus-based blockchain protocol that operates on a secure proof-of-stake consensus mechanism. It has been created to make low-cost, secure transactions possible with almost instant confirmation times.
In an effort to maintain the peg, the supply of LUNC grew significantly when USTC lost its $1 peg in May. But to no avail. When all was said and done, the circulating supply of LUNC rose in a matter of 72 hours from less than 400 million to over 6.5 trillion. Due to this, the price of LUNC fell preciously from over $100 in April to less than 1 cent a month later.
After that, the original blockchain changed its name to Terra Classic (LUNC). Meanwhile, the original Terra (LUNA) naming was assigned to a new blockchain that launched in June 2022 with no algorithmic stablecoin functionality.
What caused the LUNC supply to be hyperinflated? - Hopefully, this article can help you to get some knowledge.
