Terra Coin – Terra: Mooning LUNA at UST Demand!
There is something new and inspiring about Tera’s stablecoin technology.
Terra Coin Recap
This article will give you all of the information you need if Terra is new to you. Daniel Shin, a business entrepreneur, and Do Kwan, an integrated software developer, founded Terra in early 2018.
Developed by Terraform Labs, which was formed by the Terra Alliance, a conglomerate of South Korean enterprises in the e-commerce sector, Terra was built by Terraform Labs.
A number of funding rounds were completed by Terraform Labs in 2018, and the Terra mainnet became operational in April 2019. A Terra stablecoin was the KRW token for the Korean one, and the LUNA coin is collateralized by the LUNA coin.
Nearly 2.5 million South Koreans use Terra’s KRW in the Chai mobile payments app, which is integrated with Terra’s KRW. The most popular decentralized stablecoin currently offered by Terra is the USD StableCoin.
Burning equal amounts of LUNA is required in order to mint UST or another Terra stablecoin. To illustrate, a LUNA that is worth 10 U.S. dollars burned would produce 10 US dollars.
By making UST burnable and producing the equivalent amount of LUNA, UST is therefore economically motivated to keep its peg. LUNA holders can mint USTs and profit 50% by burnt coins when UST is trading at a dollar 50 level. Eventually, due to an increased supply of US dollars, the peg will be lowered to a dollar again.
The holders of UST can also burn their tokens to make LUNA and make a 2x profit if UST is trading at 50 cents. As a result, the one-dollar peg is restored as a result of a decrease in UST in circulation. A small fee is taken from every LUNA burned to generate UST to fund new Terra projects, protocols, and events.
Powered by Terra’s proof-of-stake blockchain, it can process a few hundred transactions a second, has 130 validators and can handle a few hundred transactions a second. Furthermore, they work as oracles that verify Terra’s various stablecoin exchange rates with LUNA.
Validators on Terra do not have to stake a minimum amount. It must be staked enough for LUNA to rank among the top 130 validators in terms of stake. This includes any LUNA which has been delegated. For both validators and delegators, stake rewards are now just shy of 6% annually, and stakers can withdraw their LUNA within 21 days.
Terra slashes all LUNA stakes each time a validator misbehaves. TerraForm Labs and Terra Alliance received 30% of the tokens, 20% of them went to Terra Alliance employees, 26% went to investors, 4% to exchanges for liquidity, and 20% were set aside to handle any market volatility.
The maximum supply of Terra is one billion per year. There are essentially two types of LUNA production, when there is less than one billion LUNA, new ones are gradually minted, while if there are more than one billion LUNA, excess LUNA are gradually burned. Please read my previous article on Terra if you want to learn more about it.
Terra Project Updates
Terra form Labs has distributed millions in investment funds to cryptocurrency projects motivated to leverage Terra’s UST stablecoin over the last few months. Terra’s synthetic stock trading platform called Mirror, or Anchor, is Terra’s stable savings protocol.
March was the month when cash was allocated. Kash, pronounced KASH, is an intuitive front-end application that is compatible with Terra’s three flagship protocols.
Lastly, loop finance in April received funding for its Terra-powered AMM DEX, which is slated to power a food delivery application that will allow users to use any Terra token to make payments.
Furthermore, Spar Protocol was paid by Terra to create a decentralized hedge fund for investment on behalf of its clients by so-called pool managers.
A few months ago, Terraform Capital brought attention to the Harpoon Protocol, which will provide a platform that makes it possible for non-technical people to purchase any cheap collateral they want from Anchor.
Pylon Protocol took the stage less than a month later with its launch pad service which, among other things, redirects Anchor savings yields to new projects building on Terra while exchanging tokens for them.
Moreover, Stata Labs promised in June that it would take staking on Terra and other PoS cryptocurrencies to the next level with its new staking dashboard, which, quote, would enable ‘Yearn finance style strategies on staking rewards.’
Terraform recently made an investment in the Nexus Protocol, a protocol designed to maintain steady returns from any funds deposited into Anchor Protocol, even during periods of market instability.
In May, Terra co-founder Do Kwan presented Terra’s governance forum attendees with a comprehensive decentralized DeFi insurance protocol, Ozone, described in more depth then.
It is not necessary to get too technical in explaining how Ozone will ensure the Anchor Protocol UST earns interest. In case you want to learn exactly how Ozone works, I’ll leave the link to someone’s post at the bottom.
Over a dozen VC firms took note of all these amazing dAps, which led to the creation in June of an ecosystem fund of 150 million dollars aimed at kick-starting even more Terra projects.
Arrington, Panterra Capital, XRP Capital, Block Tower Capital, and even Galaxy Digital were among the best-known names in crypto that participated in the list.
Massive amounts of funding have been announced by Terra, who has completed its back end for Solana’s wormhole bridge. The bridge will be live in the upcoming weeks.
Solana, Terra, and Ethereum tokens can be transferred between them quickly and decentralized through this new system. It’s possible that you did not know about Solana’s massive funding because you don’t know that it was the most funded cryptocurrency project this year.
A powerful rally was recently seen in LUNA, after all these announcements and developments. Over the past few months, the market cap of UST has also grown significantly, which explains the impact on LUNA.
There are about seven billion dollars in total value locked between Terra’s DeFi protocols, and this is mostly what has led to the demand for UST. Terra actually becomes the third-largest cryptocurrency blockchain by value locked if I’m not mistaken. It’s the third-largest after Ethereum and Binance.
That said, Terra’s team has worked hard to get UST listed on as many cryptocurrency blockchain systems as possible. The USTcryptocurrency is currently available on Ethereum and the Binance Smart Chain, while Solana may be next in line. It makes sense because Solana represents DeFi TVL’s second-largest cryptocurrency currently.
Besides the UST listing on Coinbase in early August, many of you may have also heard about the company listing on OKEx earlier that month, which was a surprising move, to say the least.
Whatever the case, Coinbase’s UST listing appears to have been the catalyst responsible for the Terra rocket going to the moon, and thus the question of how high Can LUNA fly. Read on for more information on my top cryptocurrency picks for this year, you may remember that Terra was included in that list, as well as my prediction that LUNA could rise to $100 by 2022 if USDT demand keeps rising.
I still hold that opinion, but I believe LUNA may rise even higher than one hundred dollars someday. I would argue that LUNA’s valuation is low for a crypto project like Terra, whose market capitalization is just 12 billion dollars. Particularly, considering all the centralized stablecoin nonsense that’s going around.
There is only one concern: that LUNA whales might be buying behind the scenes. Since Terraform Labs, Terra Alliance, and early investors purchased most of LUNA’s supply, most of the supply went to them. A Terra blockchain explorer built by flipside crypto does show a more comprehensive list, even though Terra’s own explorer does not do so.
The quote foundation, which likely is Terraform Labs, holds almost half of LUNA’s supply, as you can see in the graph. About a third of LUNA’s supply is held by Wales while almost a third is held by Wales.
A quick look at Flipside crypto’s Terra explorer shows LUNA’s supply is concentrated in a few regions, as well as how the rest A good sign is that LUNA is being spent by exchanges all over the world. You need to read my post on cryptocurrency tokenomics if you’re wondering why all of this is so important.
Make sure you do the proper research before investing in cryptocurrencies, and you should consult a crypto expert for advice. In the cryptocurrency market, everything can happen because of its volatile nature. It is all a prediction and assumption based on the fact that crypto markets transform over time.
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