Terra Luna Crypto Platform, %100 Everything you need to know.
Boom, Let’s talk about Terra Luna Crypto Platform, In this article you will know everything about this new blockchain payment platform that has been trending.
Let’s dive in immediately by taking the post step by step.
Terra (LUNA): A Stablecoin-Powered Payment Platform
Terra is a next-generation blockchain payment network interwoven with stablecoins and powered by its own LUNA coin.
Terra is a trustless, programmable blockchain ecommerce platform that offers fiat-pegged stablecoins to provide more stability when conducting cross-border payments.
Terra relies on its utility and staking token, LUNA, as well as several other stablecoins that are pegged to many of the world’s top fiat currencies — including TerraUSD (UST). By using stablecoins, the Terra crypto ecosystem offers low fees, instant settlement, and frictionless cross-border exchange to power retail transactions.
The Terra (LUNA) Crypto Payment Solution and Asian eCommerce
Digital payment systems are essential to the global economy and have been used for decades. However, most evolve slowly, and today’s payment solutions tend to be locally confined, reliant on rent-seeking intermediaries, and built to operate on outdated infrastructure.
Asia’s digital payments industry, in particular, is extremely crowded, with ApplePay, SamsungPay, KakaoPay, Alipay, and 45+ others in use. Myriad undifferentiated products operate without a clear revenue model or core product value, resulting in high user acquisition and retention costs.
Terra has built a next-generation blockchain payment network for the growing Asian ecommerce market that seeks to improve efficiency for payment service providers and increase value for customers.
To realize this vision, Terra helped build an ecommerce alliance with 15 initial partners that account for a combined $25 billion USD in Gross Merchandise Value (GMV), and a 45 million-strong customer base.
Terra was built using Cosmos blockchain technology and is designed to challenge incumbent retail payment apps. As a comprehensive end-to-end payment solution, Terra manages to circumvent the entire existing fragmented payment infrastructure.
This model allows Terra’s technology to potentially save payment service providers hundreds of millions of dollars per year. For users, Terra differentiates itself from competitors with discounted transaction fees — charging only 0.5% to 2%, while 2.5% to 3% is the industry norm.
Terra Stablecoins and LUNA Coin
To enable the use of Terra’s network for retail payment services, Terra’s partners use Terra stablecoins. Stablecoins are smart contract-enabled cryptographic versions of global fiat currencies that are built to reduce the volatility commonly associated with digital assets.
Thus far, Terra has rolled out TerraUSD (UST), TerraCNY, TerraJPY, TerraGBP, TerraKRW, TerraEUR, and the International Monetary Fund’s TerraSDR for use in a wide range of global marketplaces.
Terra stablecoins offer seamless cross-border value exchange and instantaneous swaps between one another, all while employing instant settlement and extremely low fees for use by anyone, anywhere.
While Terra’s stablecoins ensure seamless transactions and the stability of fiat currencies, the Terra crypto network uses its native LUNA currency as a utility and governance token to operate the collateralizing mechanisms that back and secure the price stability of the Terra network’s stablecoins.
This means that LUNA coins have an elastic supply that fluctuates according to the needs of Terra’s collateralization mechanism. Additionally, LUNA is used as part of Terra network validator staking via its Proof-of-Stake (PoS) consensus mechanism.
Many of Terra’s merchant partners and customers access the Terra blockchain network directly through Terra’s proprietary wallet, Terra Station. Terra Station supports Terra’s staking utility token LUNA and all Terra stablecoins, as well as Anchor Protocol (ANC) and Mirror Protocol tokens (MIR).
Terra Station additionally supports all other Terra ecosystem assets. The Terra wallet also allows users to interact with numerous Terra-based decentralized applications (dApps) built on the platform to swap tokens, delegate LUNA to validators, and manage funds, among other purposes.
A specialized suite of open application programming interfaces (APIs) allow merchants to set up point-of-sale payment integration with Terra Station for instantaneous purchases and settlement, and it’s designed to operate as both a mobile and web-based wallet.
The Terra Crypto LUNA-Coin-Incentivized Discount Model
The Terra protocol is designed to maintain a balanced equilibrium of all of its fiat-based stablecoins like TerraUSD, TerraKRW, TerraEUR, and TerraSDR. The system works to maintain equilibrium by using specialized algorithmic spending and stablecoin usage data gathered directly from the Terra blockchain — and the key to this rebalancing act is LUNA.
When transaction volume across Terra’s large network of payment service providers increases, the overall demand for TerraUSD (and other stablecoins like TerraJPY, TerraGBP, TerraCNY) expands, meaning that Terra must algorithmically issue new LUNA coins to maintain price stability.
Conversely, when the Terra crypto network’s payment transaction volume decreases, Terra automatically buys back more LUNA and burns the excess supply.
While the current market supply of LUNA is approximately 380 million, the Terra platform’s token burns via its equilibrium methodology can destroy as much as 58 million LUNA at one time.
With a total supply of just under one billion LUNA coins, Terra is thus able to manage its stablecoin monetary policy with robust levers, but remains subject to a degree of supply volatility.
The Terra Luna Crypto Platform: Accessible and Interoperable
The Terra ecosystem also features a development platform and blockchain-agnostic framework that allows software engineers to build their own protocols and dApps on top of the Terra network.
Two main decentralized finance (DeFi) protocols based on Terra are Anchor Protocol, which offers incentivized staking yield services, and Mirror Protocol, which enables synthetic asset creation and usage.
On top of the services being built in the Terra crypto ecosystem, the protocol aims to become fully interoperable with other leading Layer-1 blockchain solutions. This means that tokenized assets and other data can be moved to and from multiple blockchains simultaneously.
As of April 2021, Terra stablecoins are available for cross-chain asset transfer between the Terra blockchain and the Ethereum and Solana blockchains, with more network integrations to come.
Through Terra, developers are able to expose dApp userbases to Terra’s payment infrastructure in a permissionless, trustless manner. Further, Terra Bridge is a web-based service that allows users to send Terra, Mirror Protocol, and Anchor Protocol assets back and forth between Ethereum and Binance Smart Chain (BSC).
To accommodate this development, Terra makes use of a smart contract development framework called CosmWasm. CosmWasm enables developers to build smart contracts using Rust, Go, or AssemblyScript programming languages — which can then run on multiple blockchains through the Cosmos Inter-Blockchain Communication (IBC) Protocol framework.
Through IBC and other specialized mechanisms, Terra stablecoins and other Terra ecosystem assets can be used for numerous DeFi applications including for on-chain swaps, oracles, lending, borrowing, staking, synthetic assets, and much more.
The Future of the Terra Crypto Ecosystem
Terra is working toward becoming the leading ecommerce stablecoin payment and DeFi service provider in the world. Terra’s unique value proposition is contributing to the acceleration of blockchain in the Korean and Asian markets, while its main uses have massive potential to be used on a global scale.
Terra’s discount model, instant settlement, and extremely low fees for product purchases incentivize merchants and consumers to use the platform.
The Terra Station wallet, the simplistic approach to application and blockchain development, and the cross-chain value transfer functionality via Cosmos interoperable IBC solution, and Terra Bridge together produce an evolving blockchain ecosystem that continues to expand.
7 Things to Know Before You Buy Terra (LUNA)
Started in 2018 and based in South Korea, Terra is a protocol for creating cryptocurrencies with stable prices. Its native token, Terra (LUNA, has grown in value as the project has gotten more successful.
Terra already has millions of users and several ambitious projects it’s working on. If you’re thinking of investing in Terra, these are the key things you need to know.
1. The Terra protocol offers multiple stablecoins tied to different currencies
Terra’s main focus is stablecoins, which are cryptocurrencies pegged to another asset. There are already quite a few stablecoins, most of which are pegged to the U.S. dollar. Terra offers one of those in TerraUSD (UST, but it also has stablecoins pegged to many other currencies, including the South Korean won, the Euro, and the Mongolian tugrig.
Since stablecoins generally maintain the same price, they have a better shot of catching on as a way to transfer funds and to buy goods and services. Most cryptos are volatile, which limits their uses.
People who buy them tend to hold onto them, hoping the price will go up. Businesses are wary of accepting them because the price could also go down. Neither scenario is an issue with stablecoins.
2. Terra Luna tokens help balance out its stablecoin’s prices
Luna tokens are Terra’s way of keeping its stablecoin prices where they should be. It incentivizes trading between Luna and stablecoins when it needs to increase or reduce the stablecoin supply.
Here’s a hypothetical example — UST, Terra’s U.S. dollar stablecoin, is in demand. That has raised the price to $1.05 when it should be $1. To counteract this, Terra needs to add more UST tokens to the supply.
Terra then lets its Luna token holders convert Luna to UST, with each $1 of Luna being worth 1 UST. After the token holders do that, theys can sell the UST at the higher price of $1.05, making a 5% profit on however much Luna they converted.
It works like this with all of Terra’s stablecoins. And in periods of low demand, Terra lets its stablecoin holders convert to Luna at a profit. That reduces the stablecoin supply, and pushes the price back up.
3. Luna tokens are also used for staking and governance of the project
Luna token holders can stake their tokens. When you stake Luna, you pledge those tokens to the network, and they’re used to verify transactions. There’s no risk in doing this. You can always unstake your tokens (unstaking can take up to 21 days). If you stake Luna, you receive a cut of the transaction fees Terra collects on the use of its stablecoins.
Token holders also have a say in the future of Terra. Because Luna is a governance token, holders have voting rights in the project.
4. Terra is most popular in South Korea
So far, Terra has had most of its success in its home country of South Korea. According to a Terra video from May 2021, its stablecoin pegged to the South Korean won is used by over 2 million people per year for over $1 billion in spending. That video reported that Terra’s stablecoin pegged to the Mongolian tugrig was used by 40,000 people monthly.
To Terra’s credit, it already has a customer base. There’s no guarantee that it will successfully expand to the United States, but as we’ll get to now, it’s providing a big incentive to buy its U.S. dollar stablecoin.
5. Terra is offering 20% interest on UST
On March 17, 2021, Terra launched a savings and lending protocol called Anchor. This protocol allows users to deposit stablecoins and earn interest on them. On UST deposits, the annual interest rate is about 20%.
Since UST is a stablecoin that normally has a value of $1, being able to earn 20% interest on it is enticing. It is worth noting that the interest rate could change in the future, and even stablecoins aren’t as secure as money stored in savings accounts.
The high interest rate could help expand UST’s user base. If it does, that will likely be good for the price of Terra’s Luna token.
6. The Terra blockchain ranks in the top five in terms of revenue
The Luna cryptocurrency hasn’t quite broken into the top 20 by market cap. But the Terra blockchain is already one of the biggest. Revenue numbers from Token Terminal have Terra in the top five. It’s behind Ethereum (ETH, the Binance Smart Chain, and Bitcoin, and neck and neck with Polygon (MATIC.
That’s a good sign for Terra fans. While many cryptocurrency projects aren’t in use yet, Terra is one of the biggest moneymakers.
7. Buying it can be a challenge
The trickiest part of buying Terra’s Luna token is finding an exchange that lists it. Most of the top cryptocurrency exchanges don’t. Here are a few platforms where you can buy or trade for Luna:
- Binance (but only the international version, not Binance.US
Terra has picked up plenty of momentum in 2021, and it has the potential to keep growing. You should still be prepared for volatility and the possibility of losing money with it, as cryptocurrencies are high risk. But if you like what Terra offers, then it’s worth adding to your portfolio.
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