Terra (LUNA) cryptocurrency: overview, features and prospects
Terra is not only a cryptocurrency, but also a platform for supporting e-commerce applications. She has her own LUNA token (stablecoin), which has been traded on the Binance platform since August 19, 2021.
Appearance history and team
Terraform Labs, a South Korean company that develops the Terra project, was founded by Daniel Shin and Do Kaun in 2018. To develop their ideas in the development of decentralized applications, they managed to get funding from partners, including the large cryptocurrency exchanges OKEx and Huobi. D. Shin has experience working with e-commerce platforms, and D. Kaun has collaborated with well-known companies such as Microsoft and Apple.
The developers set a goal to overcome two disadvantages of blockchain-related projects: low transaction speed (poor scalability) and high commissions.
Features of the Terra ecosystem
The advantage of the platform is low transaction fees. Their usual size is up to 5% of the amount. Terra has reduced this figure to 0.5%. This stability is supported by the regulation of the money supply of the project tokens.
The Terra ecosystem has two tokens: Terra and LUNA.
When the currency becomes popular and user activity increases, additional Terra tokens are issued, which are converted into LUNA tokens. Tokens received from users are burned by the system. This prevents the inflation of the coin and maintains its stable price. Previously, only part of the tokens were burned, but now they are completely burned.
The volume of tokens in circulation should not exceed 1 million. Excess tokens are burned by the system.
Stablecoins are pegged to fiat currencies, including the US dollar, euro and Chinese yuan. They can be freely exchanged for Mongolian tugriks in the Meme Pay mobile app. Thanks to the affiliate program, money can be received almost instantly. Another solution is the CHAI application tied to blockchain technology running in the background.
A good scalability of the project is provided by the PoS (Proof of Stake) mechanism. Users can earn passive income by freezing coins on a special account and receiving a commission in tokens for this.
The LUNA token and its features
To use Terra tokens, they must first be exchanged for LUNA coins. The stability of the cryptocurrency is supported by the internal algorithms of the system, which is why LUNA is called “algorithmic tokens”.
LUNA is also a management token. Coin holders can vote for decisions on the development of the project.
So far, tokens are most popular in Asian countries. So, some taxi drivers in Mongolia accept payment with LUNA tokens.
How to get Terra (LUNA) and where to store it
You can buy LUNA tokens on the Binance exchange for bitcoins and several other types of cryptocurrencies.
You can store coins in a special wallet Lunie.io , using it also for stacking. The wallet has a web version and a mobile app for iOS and Android devices. You can also manage funds directly on the Terra project website.
Achievements of the Terra project
The creators of Terra consider the platform as a basis for the effective release of their own stablecoins by users. Currently, such developments are being conducted on the basis of Ethereum and solana, but in the future, the project managers intend to involve other registries of distributed applications.
The founders of the project claim that, due to good scalability, the average payment processing time in the system does not exceed 6 s. The commission amount does not exceed 0.6% (for comparison: the validation period of credit card transactions can reach up to 7 days, and the commission amount – up to 5%).
In 2021, LUNA entered the Top 100 cryptomonets.
Terra (LUNA) cryptocurrency: forecast and prospects
The project has appeared on the cryptocurrency market recently, but, according to some experts, it has great prospects. There are also critics of this platform.
The main criticism is related to the fact that the platform, according to some users, is not fully decentralized, as evidenced by a small number of validators. The number of validators is 130 (for comparison: Ethereum has more than 3000 validators). At the same time, 10% of validators own almost 40% of coins, which is not typical for decentralized applications.
Terraform Labs has claims from the U.S. Securities and Exchange Commission. This was officially announced on the Commission’s website. The project director D. Kaun is accused of not providing the requested securities. In response, the company’s CEO stated that he did not consider such demands legitimate. Terraform Labs filed a counterclaim accusing the Commission of disclosing confidential information and other violations of legal norms. This is the first court case between a financial regulator and a cryptocurrency developer. These events have not yet affected the exchange rate of the coin, which is not traded on American platforms.
Published: 7 January, 2022