In the cryptocurrency ecosystem, we have seen all kinds of projects. From the big and most famous projects such as Bitcoin and Ethereum, to the less decentralized projects that seek to dethrone the crypto giants, such as NEO.
However, had you ever heard of a project that links the currencies we use in everyday trading with cryptos? Possibly yes, but the project we will talk about today, falls short of this premise.
Today we will talk about a project that makes use of stablecoins and that stands out for reminding us of the relationship that our planet Earth has with its only satellite, the moon.
Get ready, because we will once again enjoy an interplanetary journey through some destinations that seem quite well known, but are giving a lot to talk about.
It has a limit of only 100 validators on the network, making it fairly centralized, but transactions within its blockchain take mere seconds.
Certainly, their transactions have a cost for services provided via smart contracts, but it is much cheaper than Ethereum’s GAS fees for example.
Terra combines the benefits of cryptos and the price stability of fiat currencies to combat the volatility of cryptocurrencies in the short and long term.
But, wait, let’s go slow. In itself, this project is made up of two tokens.
LUNA is Terra’s native token and is the backbone of the entire network, as it allows you to mine Terra Blockchain transactions. But, don’t worry, you can also buy LUNA through another crypto such as Bitcoin.
LUNA is used to secure the network, governance and collateralization for the price stability of the other network token that functions as a stablecoin: Terra USD (UST).
For this very thing, its issuance is limited and it has an offer of 1 billion LUNA tokens. If it exceeds this number, LUNA burns to return to 1 billion. This is an interesting mechanism, as it favors market capitalization.
It is an algorithmically stable coin (also called unsecured) built on the Terra blockchain. It has been active since September 2020 and its value depends on demand and supply.
To acquire this type of currency, an amount equivalent to the dollar value of LUNA must be burned. In the same way, it allows a cryptocurrency exchange, since Terra USD can be exchanged for LUNA, only if its price is above the dollar.
If it is below, LUNA cannot be exchanged for dollars, nor for UST. In addition, LUNA can be exchanged for the dollar value that corresponds to an amount of UST.
Let’s take a hypothetical example of the above, if 1 LUNA is worth 10 Terra USD and 10 Terra USD is 11 dollars, then 1 LUNA can be exchanged for 11 dollars.
After this process, a quantity of LUNA is burned, which makes it even more valuable. Finally, this way they manage to maintain price stability within the system.
It was launched in April 2019 by the Terraform Labs project, led by Daniel Shin and Do Kwon, under a proof-of-stake consensus algorithm. For this, it was incubated by Terra Alliance, a group of 15 e-commerce projects based in East Asia.
Its two main creators and developers, Daniel Shin and Do Kwon, have extensive experience in this field. On the one hand, Shin is a graduate of the Wharton School of Economics and has established several successful companies in various sectors.
One of them is the Chai application. This app is fundamental to Terra, as it allows purchases made from the app to be processed through Terra’s blockchain network.
It has now surpassed one million downloads on Android, as users can accumulate points that can be redeemed for commercial rewards with Chai partners.
Additionally, the company offers credit/debit cards called “Chai Card” that were launched in June 2019 and allow users to pay in stores using their tokens.
Do Kwon, on the other hand, is a computer scientist from Stanford University, who previously worked at Microsoft and was the founder of Anyfi, a P2P telecommunications company.
The aspects that add the most value to the entire Terra (LUNA) proposal and generate considerable demand are precisely the following projects:
It is one of the decentralized applications (dApps) using the Terra USD stablecoin. It was created in both Terra and CosmWas, using Terra USD as the base asset.
The platform allows you to create “synthetic” digital representations of real-world assets in real time, as if your computer is acting as a mirror reflecting every valuable thing you own.
This was done with the aim of encouraging the incorporation of real-world assets into blockchains.
These digital assets, called mAssets, are determined through Oracles that provide information on real-world asset prices every 30 seconds. They can also be traded on the Mirror platform.
There is also a native token for mirror called MIR, which acts as the Mirror Protocol governance and staking token.
It is another of the decentralized applications (dApps) hosted on Terra. It was launched in March 2021 and is aimed at people who are not very crypto-savvy.
Therefore, its objective is to enable all types of users to use a simple and easy-to-use decentralized financial savings product (DeFi).
Likewise, he wants to increase the facilities and availability for anyone to earn a stable passive income on the blockchain.
In addition, it offers a wide range of products with individual risk/reward ratios and ensures stable performance by facilitating instant withdrawal of a sum without the need for a lock in period.
It has not yet been implemented and there is little information known about this project.
It was discovered by Twitter by the Terra community and crypto enthusiasts, who have speculated that it is a user-friendly solution that will bring together both Mirror and Anchor.
Congratulations for making it to the end! You are an exemplary Bitnauta. It has been an article full of information, but we hope you found it useful to understand a little more about the crypto ecosystem.
But…oh…wait, you were left wanting more?
Don’t worry! At Bitnovo, we are working hard so that you have the best information at your fingertips and in less time than a rooster crows on our blog. We also have our own website where we bring you closer to the world of cryptos in an easy and safe way.
Are you ready to take action? Perfect, see you on Bitnovo and on the blog in a new post.