Terra is a blockchain protocol that utilizes fiat-pegged stablecoins to facilitate price-stable global payment systems. The protocol aims to merge the stability and widespread use of traditional currencies with the decentralized nature of blockchain technology, enabling fast and cost-effective transactions. Development of Terra started in early 2018, with its mainnet going live in mid-2019. The platform supports stablecoins pegged to various currencies, including the U.S. dollar, the South Korean won, the Mongolian tugrik, and the International Monetary Fund's Special Drawing Rights basket. In mid-2022, the original Terra blockchain was rebranded as Terra Classic, while a new chain was introduced under the name Terra (LUNA). The native token of the original chain, LUNA, was renamed LUNA Classic (LUNC). Similarly, the stablecoins on the original network (UST, KRT, EUT) were rebranded as Terra Classic stablecoins (USTC, KRTC, EUTC). The new Terra chain does not include stablecoins. The addition of "Classic" to the original chain's name draws a parallel to the Ethereum and Ethereum Classic split in 2017. According to Terra's CEO, Do Kwon, the collapse of UST in 2022 was a pivotal moment comparable to Ethereum's DAO hack in 2017. **Luna Classic (LUNC) and Terra (LUNA): Key Differences** Luna Classic (LUNC) is the original native token of the Terra blockchain, launched in 2018. It operated on the initial Terra ecosystem code before the creation of a new chain, now known as Terra (LUNA). LUNC's primary role was to stabilize the algorithmic stablecoin UST by adjusting supply through minting and burning mechanisms. However, in 2022, UST lost its peg to the US dollar, triggering a collapse. The algorithmic mechanism led to excessive LUNA token creation, hyperinflation, and a drastic decline in the original LUNA token's value. ### **Terra (LUNA) vs. Terra Classic (LUNC)** The two tokens exist due to the **Terra Ecosystem Revival Plan 2**, which involved a blockchain fork. This process preserved the original chain while creating a new one. - **Terra Classic (LUNC)** represents the original blockchain, rebranded after the fork. - **Terra (LUNA)** is the new chain's native token, distributed via an airdrop to pre-collapse LUNA and UST holders. This separation allows both versions to operate independently within the Terra ecosystem. For further details on the Terra crash, refer to DroomDroom's analysis. Terra was founded in January 2018 by Daniel Shin and Do Kwon. The project was designed to encourage blockchain and cryptocurrency adoption by prioritizing price stability and usability. Kwon served as CEO of Terraform Labs, the company behind Terra. Before Terra, Shin co-founded and led Ticket Monster (TMON), a major South Korean e-commerce platform. He later co-founded Fast Track Asia, a startup incubator that helps entrepreneurs build fully operational companies. Kwon previously founded Anyfi, a startup focused on decentralized wireless mesh networking solutions. He also worked as a software engineer at Microsoft and Apple. Terra distinguishes itself by utilizing fiat-pegged stablecoins, aiming to merge the global accessibility of cryptocurrencies with the price stability of traditional fiat currencies. The platform maintains its stablecoin peg through an algorithmic mechanism that adjusts supply based on demand. This is achieved by incentivizing LUNA holders to exchange LUNA and stablecoins at favorable rates when necessary, either increasing or decreasing the stablecoin supply to align with market demand. Terra has formed partnerships with several payment platforms, primarily in the Asia-Pacific region. One notable collaboration is with Chai, a South Korea-based mobile payments app, where transactions made through the app on e-commerce platforms are processed via the Terra blockchain. Merchants are charged an average fee of 2%–3% per transaction. The Terra Alliance, a coalition of businesses and platforms supporting Terra's adoption, further bolsters the ecosystem. The alliance includes e-commerce platforms from 10 countries, collectively serving 45 million users and handling $25 billion in gross merchandise value. *(Note: Links from the original text have been preserved for reference but are not hyperlinked here.)* The total supply of Terra Classic (LUNC) is 6.9 trillion, with 6.5 trillion LUNC currently in circulation. (Note: The original date reference has been removed to keep the content evergreen.) The Terra blockchain uses a proof-of-stake consensus algorithm built on Tendermint. LUNA token holders can stake their tokens to help validate transactions and earn rewards proportional to their stake. Tokenholders also have the option to delegate validation responsibilities to others while still receiving a share of the rewards. Validator nodes on the Terra network follow recommended security practices to help maintain network integrity. A security audit of the Terra blockchain was conducted by CertiK, a blockchain verification and penetration testing firm. The audit evaluated the network's economic model, architecture, and coding language to assess potential vulnerabilities, including market manipulation risks. CertiK concluded that the Terra network's modeling and mathematical framework were sound, though it did not assess the blockchain's performance. *(Note: Links and references to specific reports have been removed to maintain an evergreen format.)* Terra Classic (LUNC) is available on several major cryptocurrency exchanges, including Binance, KuCoin, Kraken, Huobi Global, PancakeSwap (V2), MEXC, and Gate.io. For more information on crypto terms, you can explore DroomDroom's glossary. *(Note: Removed promotional links and time-sensitive references while maintaining factual details about exchange availability.)* The LUNA token and UST are interdependent, as the Terra ecosystem relies on the adoption of UST as a stablecoin. LUNA serves as collateral for UST and is burned when demand for UST increases. Protocol upgrades have introduced mechanisms that could lead to a deflationary supply of LUNA over time. Conversely, LUNA's value may decline if UST faces instability. For example, UST temporarily lost its peg after the Wormhole hack, causing a short-term drop in LUNA's price. In a separate event, UST Classic depegged significantly due to liquidations and withdrawals, falling to a low of $0.044. LUNA Classic also experienced a sharp decline, losing over 99% of its value from its previous high above $80. UST Classic did not regain its peg afterward. Learn about **Terra (LUNA)** and **TerraClassicUSD (USTC)**. Explore **Tether (USDT)** and **USD Coin (USDC)**. **What is a stablecoin?** Discover more through our educational resources. See the leading stablecoin tokens by market capitalization.