Did you know that the global cryptocurrency ownership rate is about 3.9%? More than 300 million users are using cryptocurrency. Furthermore, more than 18,000 businesses in the world accept payments in the form of cryptocurrency.
Despite this massive user base, the price volatility of cryptocurrencies is undeniable. Different projects are being developed to solve the issue of price volatility. One of those projects is the Terra Protocol.
Terra Protocol uses a policy of elastic money for creating stable cryptocurrencies. It focuses on fiat-pegged currencies. LUNA is the currency used for the Terra Protocol project and together called Terra LUNA.
Terra Project: A Brief History
The Terra Project is the brainchild of Do Kwon and Daniel Shin, who founded it in January 2018. They started this project to offer usability and price stability by adopting cryptocurrency and blockchain technology.
Both Daniel Shin and Do Known established the Terraform Labs, from where they started this project. The co-founder, Daniel Shin, with his team started preparations to develop the LUNA token. About $62 million was raised for this venture between January 30 and March 1, 2019.
Terraform Labs raised the fund through ICO (Initial Coin Offering), an unregulated means to raise funds for cryptocurrency ventures.
During this process, the Terraform team launched a new service called Chai Pay on their platform. The team made the Terra LUNA token available for cryptocurrency exchanges in July 2019.
Terraform started the Terra Project to address different issues that the top Stablecoins faced in the market. They wanted to begin by decreasing centralization and establishing functions across several blockchains.
The project also wanted to eliminate any technical limitations present on the assets. It was the open and decentralized financial infrastructure of the project that made this elimination possible.
Terra (LUNA): Functionality
Terra was built as a unique platform that uses fiat-pegged Stablecoins for combining the daily fiat currency price stability with cryptocurrency benefits. It keeps a one-to-one peg using an algorithm that adjusts the supply of Stablecoins based on the market demand.
The whole process is done by providing incentives to LUNA holders and prompting them to swap LUNA and other Stablecoins. You can do this at exchange rates that would be profitable to you. Furthermore, the exchange rate would be such that it would either contract or expand the supply to match the market demand.
Terra has partnerships with different payment platforms in multiple regions. It partnered with a South-Korean mobile payments platform, Chai, in July 2019. Any payments made on this payments platform were processed through the Terra network. The merchants were charged about 2% to 3% fee for each transaction.
Terra (LUNA): Benefits
With Terra (LUNA), you will not require banks to access individual digital payments. You will also get advanced functioning which will be beneficial for you in this decentralized platform. There are several benefits of Terra (LUNA).
The plan of Terra is very development-focused, where programmers can create smart contracts in AssemblyScript, Rust, and Go. You also get additional functionality by using the network’s oracles.
Oracles are very important to blockchain networks and are off-chain sensors. They can establish a communication with the blockchain and for price discovery reasons.
Terra establishes an interconnected ecosystem that lets you transfer important information. You can also share this information on different channels like Solana and Ethereum. These chains are connected using Cosmos IBC.
The network aimed to untangle the complicated value chain for payments and make it simpler. Terra focuses on using one blockchain layer for decreasing or eliminating payment gateways, credit card channels, and banks.
Terra (LUNA): Important Facts
Terra (LUNA) currently has more than a million users and multiple projects. Users need to know about some facts which would help in their purchase.
Balances Stablecoin Prices
Terra uses LUNA tokens to maintain Stablecoin prices. It provides incentives when trades are made between Stablecoins and LUNA, depending on whether the Stablecoin supply needs to decrease or increase.
When there is low demand, Stablecoin holders can convert the LUNA for profit. This decreases the supply of Stablecoins and increases the price.
Governance and Staking of Projects
The best thing about the LUNA token is you can stake these tokens. This means you are pledging these tokens to the Terra network and used for verifying transactions. A great thing about this process is there are no risks involved.
If you wish, the tokens can be unstacked at any time. When you stake the tokens, Terra offers you a certain portion of the Transaction fees derived from the Stablecoins.
The token holders can also give their input on Terra’s future. Since the LUNA toke is a governance token, you will get voting rights for this project.
Purchasing Is a Challenge
One of the biggest challenges Terra has is it might be hard to find an exchange list for it. You might not even find the topmost cryptocurrency exchanges that list it. Some of the platforms that let you trade or buy LUNA are:
- Binance – only international
Terra is a growing platform and has a lot of scopes. With time users will find more options for exchanges which will make the whole process less challenging. If you choose Binance as your option, it is necessary to understand that it is just the international version. The Binance U.S. version will not offer you the option for Terra LUNA.
Since its inception, Terra LUNA has had a great performance review, and this strength will continue to grow. However, cryptocurrencies are a risky affair, and you still need to be aware of certain volatilities.
You might come across various fluctuations and uncertainties during the trading process. However, with the right understanding, Terra LUNA can be a great addition to your portfolio.Terra LUNA still offers a stable platform that other platforms have failed to provide despite all the uncertainties. You can take the help of experts to trade cryptocurrencies to reap the benefits of Terra. The expert will advise you on the best way to trade Terra LUNA.