Breaking its downtrend, Terra Luna Classic (LUC) drew major offers at around $0.000226. The coin’s performance over the past few weeks has been dismal ahead of the new governance proposal to reactivate the IBC.
The coin’s unexpected rally could be attributed to the ongoing 10880 governance proposal. This is to unfreeze and update the IBC Tendermint client 07-tendermint-71, which refers to the Cosmoshub.
But what is the IBC and why is it important?
It is important to note that the IBC protocol facilitates communication and the transfer of value between the different Cosmos chains. When the ecosystem collapsed in May, the Terra Classic network, which was initially a Cosmos channel, had the channels shut down permanently to avoid temporary losses.
Reactivating the IBC has become vital to accessing stranded cash and increasing the channel’s utility, as the network prepares to recover. As developer Edward Kim revealed in September, the Terra Rebels, a separate group of volunteers working on the Terra Classic channel, contacted Gadikian for this purpose.
In particular, Gadikian offered to clean up the channel in addition to helping them with the challenge of reactivating the IBC after it was permanently disabled.
Proposal #10880 will pass quorum soon.
Reactivating IBC’s brings interoperability meaning that funds on other chains can be used to generate yield from liquidity pools.https://t.co/CGYqVUXnc3 pic.twitter.com/Pp9dvr96xq
— Knowledge (@SkoobyDol) November 5, 2022
According to Venus, a Terra Rebel and Core Team Project Manager, projects on the Cosmos Channels may choose to incorporate Terra Luna Classic (LUC) as a payment option once the IBC is re-enabled in order to attract its vibrant community. As a result, the utility of LUNC and the volume of on-chain transactions are expected to increase.
Another proposal 5234
Along with the IBC reactivation proposal, Proposal 5234 reduced the combustion tax from 1.2% to 0.2% and made the Terra Classic one of the highest profile topics in the industry. Through this proposal, billions of LUNC tokens will be taken out of circulation, which will increase demand and help drive up the price of the token.
The LUNA Classic gains were fueled by reports of the project listing on Coinbase on Monday. Although the authenticity of this rumor remains to be verified.
At the time of writing, LUNC is holding at $0.00025 with a 24-hour trading volume of $600. Over the past 24 hours, Terra Classic has increased by more than 11%. With a market capitalization of $1.6 billion, the company is currently ranked 38th in the market.
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