Quick Facts

Approximate Market Cap$40,206,510,184
Year Established2018
FounderDaniel Shin, Do Kwon
Symbol/AbbreviationLUNA
UtilityStablecoin

Within both fiat and blockchain markets, there is a necessity for a decentralized, price-stable money system. While everybody may see the advantages, few have a clear plan for implementing such a currency. If such a system succeeds, it will have a huge influence as the best use for cryptocurrency.

Terra is both price-stable and growth-driven.  It achieves price stability by a flexible money supply provided by steady mining incentives. It also uses seigniorage generated by its minting activities as a transaction stimulant. That is how it promotes further adoption.

What is Terra – Definition

Terra is the next-generation open-source blockchain network. Its native cryptocurrency is the LUNA token.

There are already a few stablecoins, most of which are tied to the US dollar. TerraUSD is one of those currencies offered by Terra (UST). Terra also offers stablecoins tied to a variety of different currencies. These include the South Korean won, the Euro, and the Mongolian tugrik.

Terra (LUNA) is a Delegated Proof-of-Stake (DPoS) network. Validators are those who confirm transactions and add blocks to the blockchain. They are awarded in LUNA for their services.

Terra network employs a native token, stablecoin protocol, oracle system, and smart contracts. The unique features of Terra (LUNA) include:

  • Anchor protocol
  • Mirror protocol
  • Gas
  • Staking
  • DPoS consensus
  • Community-based governance.

Pros and Cons

Pros

  • Functions on several chains
  • Focuses on growth
  • Accepted by major exchanges

Cons

  • Less decentralized
  • Not popular worldwide
  • Several types of fees apply

The History

Terra (LUNA) debuted in the market in January 2018. Daniel Shin and Do Kwon, the network’s creators, aimed to develop a new form of “smart money.” The idea behind Terra was to help the adoption of blockchain technology and cryptocurrencies by focusing on price stability and usability.

Terra is Terraform Labs’ blockchain project. It underpins the startup’s cryptocurrencies and financial products.

Terraform Capital was formed with a $10 million initial investment to finance audits for projects using UST/LUNA. Leading security firms Quantstamp, Sentinel, Solidified, and Cryptonics have joined Terra Capital as audit partners.

How Terra Works

The Terra Protocol’s aim is to liberate people from the hidden costs of everyday transactions. The idea behind its design had two goals in mind: stability and acceptance by e-commerce platforms.

Terra is comparable to Bitcoin but has quicker transactions. Its enhanced security is due to the integration of mining and Dark Gravity Wave difficulty recalculation.

Terra employs a programmable architecture. It delivers self-stabilizing stablecoins and other unique features to the market. The network depends on a flexible monetary supply mechanism to achieve this goal. The system automatically changes the number of its stablecoins to keep their prices tied to their underlying assets.

The Anchor protocol is introduced by the network as a way for Terra stablecoin holders to receive incentives. Terra stablecoins receive earnings in the same way as a savings account does. Instant deposits and withdrawals are also supported by the protocol.

The Terra Protocol is based on the Tendermint Delegated Proof of Stake algorithm and the Cosmos SDK. It aims to become a new global financial infrastructure upon which various DApps may be built.

Advantages and Disadvantages

Advantages

Interoperability

The network is intended to function on several chains, which are linked by the Cosmos IBC. Terra is now available on Ethereum and Solana.

Programmable

Terra’s goal focuses on growth. The network enables developers to create smart contracts in Rust, Go, or AssemblyScript.

Streamlined finance

With a single blockchain layer, terra helps to cut or end the necessity for credit card services, banks, and payment gateways.

Disadvantages

Adoption

Terra is gaining popularity in the Asian area, particularly in South Korea. Yet, it will take time to extend into larger markets like Europe, the Americas, and Oceania.

Limited nodes

Terra only permits 100 active validators or block generators to keep the system secure. As a result, Terra is less decentralized than other blockchains.

Terra in the Global Crypto Market

Terra is collaborating with Stablecoin and DeFi service providers to become the world’s largest e-commerce payer. The Terra Station wallet, its method to create blockchain apps, and cross-chain asset transfer functioning result in a developing blockchain ecosystem that continues to grow.

Terra (LUNA) is currently ranked 12th with an approximate market cap of  $11,092,296,272.

The price stability feature of LUNA is not present in many digital cryptocurrencies. That makes it a stable currency used to trade and store value alongside fiat and digital currencies. Its stability mechanism, which automatically improves Terra supply in response to changes in demand, keeps the price steady.

FAQ

What kind of blockchain uses Terra?

Terra was created utilizing Cosmos blockchain technology and is intended to compete with existing retail payment applications.

What is the total number of Terra coins?

There are 400 million LUNA coins in circulation, with a total supply of 994 million.

What is Terra USD backed by?

The TerraUSD (UST) stablecoin is based on the Terra blockchain. There is no technical support for the UST token. Rather, the production of the UST is enabled by the burning of LUNA tokens.