LUNA (Terra) – A cryptocurrency from another planet

Terra is a blockchain protocol developed to strengthen the infrastructure of stable payments (stablecoins) and decentralized finance (DeFi). The project relies on a set of stablecoins that are pegged to various fiat currencies. The stable price is maintained thanks to an algorithm and its cryptocurrency called LUNA.

Currently this project is supported by a set of stablecoins that are linked to various fiat currencies. And if we think about it, by releasing stablecoins related to the price of fiat currencies, Terra immediately becomes a part of the digital central bank. Similarly, another part of the system helps replace today’s complicated and expensive payment chain that includes banks, payment gateways, and credit card networks. In this way, Terra provides efficiency to merchants and consumers, while continually improving the infrastructure and tools of the ecosystem to finally arrive at a transparent, distributed and credibly neutral payment system.

The project is already driving mass adoption through its partner CHAI, a South Korean payment gateway that already has more than 2 million users. Using this as a springboard, the team hopes to create a more widespread system, moving to other parts of Asia.

Something that Terra aims to fix is ​​that as we well know almost all cryptocurrencies experience wild price fluctuations. This price volatility has been an obstacle to the adoption of cryptocurrencies as a medium of exchange or as transactional currencies as very few people want to be paid in a currency that can drop 10-20% or more in a period of time. 24 hours. This problem is exacerbated when it comes to deferred payments, such as mortgages or labor wages. Project like Terra are working on solving this problem by creating stable price cryptocurrencies linked to various fiat currencies.

LUNA is the native token of the Terra network, which is used to secure the network, governance, and collateralization for stablecoin price stability. In other words, LUNA is nothing more and nothing less than the backbone and base of the entire network and the ecosystem of Terra. Unlike other decentralized stablecoins, Terra stablecoins are not guaranteed per se. To mint a Terra stable coin like UST, you must burn the equivalent dollar amount of Terra’s native coin, LUNA.

Let’s take an example: If a user had 10 UST and the price of LUNA was 5 dollars, they would get 2 LUNA for burning that UST. This creates a smart financial incentive that ensures that Terra’s stablecoins always maintain their fiat parity.

LUNA was born in February 2019 and allowed the team to raise $ 72 million by selling tokens at $ 0.80 each. That turned out to be profitable for early investors when the LUNA token started trading in September 2019 at around $ 1.30. Now in the most recent on February 19, 2021, the LUNA token continued to rise and was trading at $ 6.39, in March 2021 it began to exponentially exceed that price and on March 22 it achieved a record (so far) over USD $ 22.

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