The story of the Terra (LUNA-USD) and Terra Classic (LUNC-USD) ecosystems is one for the ages. It reminds investors of the danger of playing in a volatile space, and it proves that no matter how big a project is, things can always stall out. But recently, both the LUNC crypto and the LUNA crypto have been impressing with big gains. Now, it seems investors are keen on returning to the layer-1 and its newer, shinier sibling network. But, which is a better buy?
Terra was, until earlier this summer, a single layer-1 dapp protocol. It utilized a LUNA token, as well as a UST stablecoin, which has since been rebranded to TerraClassicUSD (USTC-USD). UST took an interesting price-stabilization model; by connecting the LUNA supply to the UST supply, a smart contract could constantly change the supplies of the two in order to keep supply of UST at equilibrium with demand, thus maintaining its $1 price.
As innovative as it was, stable it was not. UST de-pegged from its $1 price with too much sudden transaction activity. In May, it ended up collapsing the entire ecosystem when traders made large, sudden transactions. This wound up driving much of the entire crypto market’s collapse, and ultimately bankrupted at least three different crypto investing companies.
Terra developers would go on to try and revive the decimated network, putting a hard fork proposal to a community vote. After passing it, the developers rebranded Terra to Terra Classic, changing the LUNA and UST cryptos to LUNC and USTC, respectively. A hard fork created an entirely new, developer-oriented network. This new network has taken the Terra name, as well as a new coin bearing the LUNA ticker.
LUNA vs. LUNC Debate Heats Up as Both Cryptos Gain
At first, it seemed like the LUNA and LUNC cryptos would struggle to catch on. After all, multiple controversies have hampered the development team since Terra’s collapse. Plus, the project has become subject to multiple probes in its homebase of South Korea. But now, it looks like both cryptos are on the up-and-up. So, which one is better?
Terra Classic has been slowly picking up steam since late August. After seeing almost no price action following its launch in early June, prices saw an increase of over 500% between Aug. 23 and this week. This comes, of course, on the back of a sizable uptick in trading volume. Where daily volume typically sat around $30 million to $100 million prior to the bull run, it now sees daily volumes regularly above $700 million. Yesterday, over $3.8 billion in LUNC traded hands.
On the other hand, the new Terra project’s upswing has been quite sudden. Indeed, the LUNA crypto is gaining over 220% in just the past 24 hours. Where yesterday, the coin saw a transaction volume just below $300 million, it has already seen $4 billion in LUNA exchanged today.
Obviously, investors are becoming intensely interested in the projects, banking on some sort of comeback. But when it comes to usability and likelihood of growth, the new Terra ecosystem has the edge. Developers created it as the new homefront for developers who didn’t want to build dapps on the decaying Luna Classic network. In this sense, one can think of Terra and Terra Classic just like Ethereum (ETH-USD) and Ethereum Classic (ETC-USD). Sure, they are both of the same genetics, but Terra is going to receive all of the care and shiny new upgrades from developers, making it the safer bet.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.