Terra Classic (LUNC), once a star project in the Crypto Assets market, ranked fifth in global market capitalization. This project is known for its unique Algorithmic Stablecoin ecosystem, becoming one of the most representative Algorithmic Stablecoin experiments in the history of Crypto Assets.

The core assets of the Terra Classic ecosystem include two key components: USTC and LUNC. USTC is an Algorithmic Stablecoin aimed at maintaining a stable price of 1 dollar. LUNC serves as the governance token of the ecosystem, while also taking on the function of price adjustment, similar to an Algorithm-driven central bank.

The operation mechanism of the system is very clever. When the price of USTC exceeds 1 dollar, for example, reaching 1.1 dollars, users can mint 1 USTC (worth 1.1 dollars) by burning an equivalent of 1 dollar in LUNC. This process increases the supply of USTC, causing its price to fall back to around 1 dollar. Conversely, when the price of USTC is below 1 dollar, for instance, dropping to 0.9 dollars, the system will reclaim 1 USTC and mint an equivalent of 1 dollar in LUNC. This mechanism is designed to automatically maintain the price stability of USTC through market arbitrage activities.

However, despite its intricate design, the Terra Classic ecosystem still faces severe challenges. According to data from CoinMarketCap, by early 2025, the number of holding addresses for LUNC was 12,071, showing only a slight increase compared to 11,782 in September 2023. On the other hand, data from ATOMScan indicates that the total number of addresses for LUNC and USTC has reached 5.5 million. This significant discrepancy is mainly due to different statistical criteria: CoinMarketCap only counts active wallets, while ATOMScan includes all historical addresses, including cold wallets and small holding addresses.

In terms of supply, LUNC is undergoing a continuous deflationary process. The current total supply is 649 trillion coins, having decreased by 414.8 billion coins, which corresponds to a reduction of 6.38%. This reflects the efforts of the project team to enhance its value by reducing the token supply.

The story of Terra Classic reminds us that in the rapidly evolving field of Crypto Assets, innovation and risk often coexist. Although the project once shone brightly, the challenges it faced in its subsequent development highlight the complexity and potential fragility of the Algorithmic Stablecoin model. For investors and Crypto Assets enthusiasts, the experience of Terra Classic is undoubtedly a case worth in-depth study and reflection.