What is Terra? Terra (LUNA) is a Blockchain network developed by Terraform Labs. In this article, you can access answers to frequently asked questions such as what Terra is, what it offers, what is LUNA, how to get it, what it does. As Kriptokoin.com, we have prepared it for our curious readers. Let’s examine the project together.
What is Terra?
Founded in 2018, Terra is a blockchain network that aims to combine the freedom of decentralized cryptocurrencies with the stability of fiat currencies such as the dollar and lira. Blockchain produces decentralized stable coins for this purpose. Stable coins are digital assets whose value is tied to a real-world fiat currency. The network has a decentralized, US dollar-indexed stablecoin called terraUSD (UST). The native cryptocurrency of the blockchain is LUNA.
Having a decentralized and distributed structure, the network works as a payment ecosystem. However, unlike other ecosystems, the platform uses stable coins, which institutional companies will prefer, instead of highly volatile cryptocurrencies. Just like Solana, Terra users can run decentralized applications (dApps). The network works with a Proof-of-Stake (PoS) consensus mechanism. This means users can earn token rewards by acting as a node validator.
What is LUNA coin? What does it do?
Terra network has two cryptocurrencies. These; terraUSD (UST), a stable coin pegged to the US dollar, and the LUNA coin, which works as the network’s native cryptocurrency. UST and LUNA work in integration with each other. The only way to create stable coins on the network is to burn LUNA. In the crypto space, burning means sending an asset to a dead wallet, removing it from circulation forever. Besides, stable coins can be exchanged with LUNA. LUNA is an altcoin that optimizes the value of stablecoins. Apart from these, LUNA stands out with various use cases within the network.
Users can stake LUNA. LUNA holders earn additional token rewards upon expiry by locking their holdings for a specified expiration date. In addition, users holding the token can be used for various purposes such as giving representation to other users, voting by participating in the management of the platform, and offering them as collateral while performing transactions. At the time of writing, LUNA coin was the 9th largest cryptocurrency with a market cap of around $31.4 billion. In addition, 362 million LUNAs were in circulation.
What are the advantages?
- On the Terra network, users can pledge their LUNA assets as collateral for transaction verification purposes and earn token rewards accordingly.
- LUNA coin has staking feature. Users can obtain additional token rewards by locking their assets.
- With a high market value, the network is secure as it is protected by a Tendermint-based PoS mechanism.
- It is quite easy for users to access LUNA as it is listed by many crypto exchanges with large trading volume.
- Users have the advantage of creating and running decentralized applications on the network.
What are the disadvantages?
- Stable coins are on the radar of political entities such as the USA and the European Union. Any adjustments to these assets could adversely affect the Terra ecosystem.
- LUNA coin has high volatility just like other cryptocurrencies. High volatility means the price fluctuates in a wide range.
What is Terra? How to get LUNA coin?
LUNA coin is supported by most of the crypto exchanges in the market. Exchanges listing the altcoin include crypto exchanges such as Binance, Coinbase, Kraken, Huobi Global, Bitfinex, KuCoin, Bybit, Gemini, and Crypto.com. Investors interested in the Terra project can buy the altcoin by signing up for one of these exchanges and depositing money in their wallets.
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