Luna Classic (LUNC) is the native token of Terra Classic, the original Terra blockchain. It took that name after the network's algorithmic stablecoin, UST, collapsed in May 2022. The chain is still running and its community governs it through on-chain votes. The latest change to LUNC's economics came on 2 August 2026, when a governance vote raised the on-chain burn tax from 0.5% to 1.5%. Terra Classic has no company behind it, more than 6.4 trillion tokens exist, and its founder Do Kwon is serving a 15-year US prison sentence.
The latest: what changed in 2026
Burn tax raised to 1.5% (2 August 2026)
Proposal 12223, "Set the On-Chain Tax Rate to 1.5%", was submitted on 25 July 2026 and passed when voting closed on 2 August 2026. According to the proposal text, the tax keeps its 80/10/10 split:
- 1.2% of each taxed transaction is burned
- 0.15% goes to the Community Pool
- 0.15% goes to the Oracle Pool
The chain's tax module reports burn_tax_rate as 0.015 (1.5%). The tax applies only to transactions made on the Terra Classic blockchain itself. Trades that happen inside a centralised platform's own books never touch the chain, so they are not taxed.
Mandatory security upgrade (September 2026)
The project's GitHub lists release v4.0.1-patch.3, published on 14 September 2026, as a mandatory security release for the columbus-5 mainnet. It fixed a critical vulnerability in the wasmd and wasmvm smart-contract components. The fix activated through upgrade v14_3 at block height 30,544,730, estimated for 24 September 2026. A non-consensus follow-up, v4.0.2, came out on 28 September, and v4.1.1 was listed as a pre-release on 12 October. An earlier release, v4.0.0, moved the chain to Cosmos SDK 0.53.
Supply today
In late October 2026 the chain's bank module reported a total LUNC supply of about 6.445 trillion (6,445,162,519,491 LUNC).
How LUNC came to exist
UST and the LUNA peg
Terraform Labs, co-founded by Do Kwon, built Terra around UST, which the SEC calls an "algorithmic stablecoin". UST was not backed by dollars in a bank. It was supposed to hold its US dollar peg because it could be swapped for LUNA, the chain's other token:
- If UST traded below $1, users could swap it for $1 worth of newly minted LUNA. That removed UST from circulation and was meant to push the price back up.
- If UST traded above $1, users could burn LUNA to mint UST.
Much of the demand for UST came from the Anchor Protocol, which advertised "as much as 20 percent interest" on UST deposits, according to the SEC.
The May 2022 collapse
In May 2022 UST lost its dollar peg. As holders swapped UST for LUNA, the system minted LUNA in huge amounts, and both tokens fell close to zero. The SEC says the scheme collapsed that month. The Justice Department describes the fraud as one that caused about $40 billion in losses.
The split into two chains (May 2022)
The Terra community passed governance Proposal 1623, "Terra Builders Alliance: Rebirth Terra Network". Voting closed on 25 May 2022. Under the proposal:
- a new chain without the algorithmic stablecoin took the Terra name, with LUNA as its token
- the old chain was renamed Terra Classic, and its token became LUNC
- new LUNA was airdropped to Luna Classic stakers and holders, remaining UST holders and essential app developers, with Terraform Labs' wallet excluded
The original UST stayed on the old chain and now trades as USTC with no working peg.
LUNC vs LUNA
| Luna Classic (LUNC) | Luna (LUNA) | |
|---|---|---|
| Chain | Terra Classic (original, columbus-5) | Terra (new chain from May 2022) |
| Algorithmic stablecoin | USTC remains, without a peg | None |
| Governance | Community proposals and validators | Separate community and validators |
They are separate blockchains with separate tokens. Holding one gives you no claim on the other.
Do Kwon and the legal cases
- SEC civil case: On 5 April 2024 a jury found Terraform Labs and Do Kwon liable for securities fraud. The final judgment, announced by the SEC on 13 June 2024, ordered Terraform to pay $3,586,875,883 in disgorgement, $466,952,423 in prejudgment interest and a $420,000,000 civil penalty. Kwon was ordered to pay $110,000,000 in disgorgement and $14,320,196 in prejudgment interest, both joint and several with Terraform, plus an $80,000,000 civil penalty. Terraform's share is treated as a claim in its bankruptcy case.
- US criminal case: Montenegro handed Kwon to US authorities at the end of 2024. He pleaded guilty in August 2025. On 11 December 2025, US District Judge Paul A. Engelmayer sentenced him to 15 years in prison for wire fraud and for conspiracy to commit securities fraud, commodities fraud and wire fraud. The court also ordered forfeiture of more than $19 million.
- South Korea: Press reports from December 2025 say US prosecutors agreed not to oppose a prisoner transfer to South Korea once Kwon has served half his term, and that he could face separate charges there.
None of these cases gives LUNC holders a direct claim. Distributions to harmed investors run through Terraform's bankruptcy process.
From Terra to Terra Classic
Step through the dated events that made LUNC what it is today, from the UST collapse to the latest burn tax vote and security upgrade.
- May 2022UST loses its dollar pegdone
As holders swapped UST for LUNA, the system minted LUNA in huge amounts and both tokens fell close to zero. The Justice Department describes the fraud as one that caused about $40 billion in losses.
- 25 May 2022Proposal 1623 splits the chaindone
Voting closed on the Terra Builders Alliance proposal. A new chain took the Terra name with LUNA, the old chain became Terra Classic with LUNC, and UST stayed behind as USTC with no working peg.
- 5 April 2024Jury finds Terraform and Do Kwon liabledone
In the SEC civil case a jury found Terraform Labs and Do Kwon liable for securities fraud. The SEC announced the final judgment on 13 June 2024.
- August 2025Kwon pleads guilty in the USdone
Montenegro handed Kwon to US authorities at the end of 2024. He pleaded guilty in August 2025.
- 11 December 2025Kwon sentenced to 15 yearsdone
US District Judge Paul A. Engelmayer sentenced him to 15 years in prison and ordered forfeiture of more than $19 million. None of the cases gives LUNC holders a direct claim.
- 29 March 2026Release v4.0.0 moves to Cosmos SDK 0.53done
The release moved the chain to Cosmos SDK 0.53. The article infers the year from the release order on GitHub.
- 2 August 2026Burn tax raised from 0.5% to 1.5%done
Proposal 12223 passed when voting closed. Of each taxed on-chain transaction, 1.2% is burned, 0.15% goes to the Community Pool and 0.15% to the Oracle Pool. Trades inside a centralised platform's own books are not taxed.
- 24 September 2026Mandatory security upgrade v14_3done
Release v4.0.1-patch.3 fixed a critical vulnerability in the wasmd and wasmvm components. It activated through upgrade v14_3 at block height 30,544,730, estimated for this date.
- 12 October 2026v4.1.1 listed as a pre-releasedone
It followed the non-consensus v4.0.2 release of 28 September.
- 25 October 2026Supply and tax checked on-chaindone
The bank module reported a total supply of about 6.445 trillion LUNC, and the tax module reported burn_tax_rate as 0.015 (1.5%).
- Not confirmedPossible transfer to South Koreapending
Press reports from December 2025 say US prosecutors agreed not to oppose a transfer once Kwon has served half his term. No transfer had been confirmed as of October 2026.
This timeline lists only the events dated in the article. It leaves out prices, burn totals and day-by-day 2022 supply figures, and it does not say whether LUNC is worth buying.
What the burn can and cannot do
The burn tax removes 1.2% of every taxed on-chain transfer for good. Some third parties also send LUNC to be burned voluntarily. Two limits matter:
- The tax only applies on-chain. Most LUNC trading happens on centralised platforms, so most trading volume never pays the tax.
- The supply is huge. With about 6.445 trillion tokens outstanding, burning billions of tokens a month is still a small share of the total.
A higher tax also makes moving LUNC on-chain more expensive, so a higher rate does not guarantee a bigger burn.
Is Luna Classic dead?
Technically, no. As of October 2026 the chain produces blocks, passes governance proposals and ships security releases. Economically, LUNC is a very different asset from the LUNA of early 2022:
- No issuer stands behind it. Development depends on volunteers and community-pool funding.
- USTC has no peg. Any plan to restore it would have to be proposed and passed on-chain, and none had restored it as of October 2026.
- Price is driven by sentiment. News about burns, upgrades and the Kwon case tends to move it more than usage does.
Risks to understand before you buy
- Smart-contract and chain risk. The September 2026 patch shows the chain still has to respond to critical vulnerabilities in its software stack.
- Governance risk. Token holders can change the tax, the fee split and other parameters by vote, and they did so in August 2026.
- Dilution history. In 2022 the supply grew from millions to trillions of tokens in days, because the swap mechanism could mint without limit.
- Liquidity and volatility. Small-cap tokens can move sharply on low volume.
