What is Terra?
Terra is a blockchain in the Cosmos ecosystem, originally known to many people for payment applications such as Chai, Memepay, using Terra’s UST coins for payments. But starting in October 2020, after the Columbus-4 update, Terra got itself a Smart contract, officially building an ecosystem.
Looking at the image above, you can see that, after aiming to build an ecosystem, LUNA price has started to grow tremendously.
What is LUNA?
One of the unique features of Terra Money is the way their token is designed. Dual Token mechanism, with TERRA Token and LUNA Token. Specifically as follows:
- TERRA is the stablecoin within Terra’s ecosystem. It is used to make payment coins inside e-commerce. Terra’s total supply will mutate to balance its value in the system.
- LUNA is collateral token or reserved token. Luna’s total supply is fixed.
What problem does Terra solve in blockchain?
Terra’s problems
Even though it’s a huge ecosystem, Terra’s ultimate goal is to develop ust-copper. Stablecoin Algorithm Terra’s, highly efficient, is not controlled by anyone, even the project itself.
The problem of the cryptocurrency currency stabilizing prices: Cryptocurrency With its advantages over Fiat, there will be huge potential in the areas of finance. But one of its biggest obstacles is price fluctuations. This makes it still difficult to apply cryptocurrency to payments and daily consumption.
The problem of transparent stablecoins: We need a cryptocurrency that is stable in price, that is Stablecoin. And one of the most popular stablecoins that we often talk about is Tether (USDT). However, people have always raised questions with this USDT, about its transparency.
The problem of applying that stablecoin in practice: Not just creating a transparent stablecoin will be easily accepted and widely used by the community. It needs a large community of use. Even those who don’t know much about cryptocurrency can use it easily.
Terra’s solution
Terra works with dual token mechanism: Terra is stablecoin and LUNA is reserved token. The working model of this mechanism, I will explain more specifically below.
With the creation of stablecoins makes it easy for users to use: Terra can confidently apply it to payments in e-commerce platforms. Currently, Terra has established an e-commerce alliance, including many regional names such as TMON, Pomelo, Tiki.vn (Vietnam) ,…
Terra stablecoin Price holding Mechanism
In this section, I will talk more specifically about the price stabilization mechanism and how the token design of the development team. As mentioned above, Terra has a Dual Token mechanism consisting of TERRA and LUNA coins.
TERRA Stablecoin
First we talk about TERRA Stablecoin:
Terra Stablecoin Family
In fact, terra is not alone as a stablecoin in Terra’s network, but it has an entire TERRA family. These TERRA coins will correspond to the world’s leading currencies USD, EUR, CNY, JPY, GBP, KRW and the IMF’s common currency, the SDR.
In other words, we have Terra Stablecoins corresponding to the “peg” with the above-mentioned currencies: TerraUSD, TerraEUR, TerraCNY, TerraJPY, TerraGBP, TerraKRW, TerraSDR.
Can swap back and forth between Terra Stablecoin coins
These coins are used directly in payment for the above goods and services in e-commerce. To increase the liquidity of the coins in this Terra family, they can be swapped back and forth quickly with the corresponding proportion of Fiat coins.
For example, TerraUSD’s forward-to-terrakrw conversion rate is equal to the exchange rate from USD to KRW.
How to determine the value of each type in the Terra Family
The value of cryptocurrencies in terra family (TerraUSD, TerraEUR, TerraCNY, TerraJPY, TerraGBP, TerraKRW,..) is determined by taking the votes of miners into the Reserve Stability fund.
How is Terra’s value kept stable?
Team dev uses algorithms to change the supply of cryptocurrencies in Terra Family. At the same time, the reserve fund from LUNA Token will also be used to stabilize prices.
LUNA – Collateral Token or Reserved Token
Terra Protocol uses a consensus mechanism Proof of Stake By Tendermint. In particular, miners must own luna tokens and stake them into the system. The strength of producer blocks is based on the amount of LUNA they stake. Thus LUNA is considered the mining power of the entire Terra network. In addition, LUNA has a price stabilization function for Terra Family.
Take terrausd, for example:
- When the price of 1 TerraUSD < $1, users can send 1 TerraUSD into the system to receive luna corresponding to 1 USD.
- When the price of 1 TerraUSD > $1, users can send LUNA (worth 1 TerraUSD) into the system to receive TerraUSD.
Terra Ecosystem
Terra Ecosystem There are currently about 80 projects, which is not too large compared to Ethereum, Binance Smart Chain,… But not a little.
In addition, the project is probably the largest currently in Terra, which is Anchor Protocol there was TVL up to $4B – a terrible amount for a project Lending launched less than 1 year (launched in march 2021).
By comparison, Compound and Aave are one of the oldest lending projects, but TVL is also around $11B, which is only about three times larger than anchor protocol.
Besides, a member of Terraform Labs – the team behind Terra, has revealed in the future there will be a lot of NFT projects launched.
In 2021, Terra has been funded up to 3 times, with the most recent being on September 9, 2021 with 5M LUNA (~$150M), from Terraform Labs itself as Project Dawn.
Details about LUNA coin
LUNA Key Metrics
- Token Name: LUNA
- Ticker: LUNA
- Blockchain: Terra
- Token Standard: CW-20
- Contract: Updating…
- Token type: Utility, Governance
- Total Supply: 994,815,826 LUNA
- Circulating Supply: 403,517,332 LUNA
LUNA Token Allocation
LUNA Token Sale
Updating…
LUNA Token Distribution
Updating…
LUNA & UST Use Case
As explained about the mechanism of dual tokens above, luna coin’s purpose is to use LUNA to stabilize the price of Terra Stablecoin.
UST, or the like, is stablecoins that can be used in payment, savings applications in the Terra ecosystem.
How to earn and own LUNA coins?
You can delegate to validators in the Terra network to receive LUNA coins. In addition, you can also buy on the exchange.
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