About Terra Coin
Terra price is today $ 18.89 with a 24-hour trading volume of $ 489,446,646. The LUNA price has increased 3.6% in the past 24 hours. It has a circulating supply of 390 million LUNA coins and a maximum supply of 949 million. Binance is currently the most active market trading with it.
What is terra
Terra is a decentralized financial payment network that is rebuilding the traditional payment stack in the blockchain. It uses a basket of stable coins with a fiat bond that is algorithmically stabilized by its reserve currency, Luna, to enable programmable payments and the development of an open financial infrastructure. By December 2020, the network had served an estimated $ 299 billion for over 2 million users.
What is luna
Luna is the reserve currency of the Terra platform. It has three core functions: i) dismantling Terra transactions by staking out, ii) ensuring the price stability of Terra stablecoins, and iii) providing incentives for the platform’s blockchain validators.
The Terra protocol runs on a PoS (Proof of Stake) blockchain, where miners have to use their Luna to mine transactions. If everything else is the same, a validator who has bet more Luna has a higher chance of generating the next terra block than another validator who has bet less. In essence, Luna represents the mining force of a validator.
However, in providing network security and validation, Luna owners and stakers are exposed to the price risks associated with the asset. This is because the Terra Protocol easily swaps Terra stablecoins for Luna at their set exchange rate to maintain the bond. When demand is high and prices are above the line, stable coins are sold for Luna. When demand is low and prices are on the bottom line, the opposite is true. In this way, validators absorb the short-term volatility of the network.
To compensate for this, the auditors receive rewards in the form of: i) engagement bonuses, ii) gas fees, iii) taxes, and iv) seigniorage rewards. The bonuses are based on the amount of the validator’s share and are structured in such a way that incentives are created to increase the volume of transactions. Gas fees and taxes are similar in that all Terra transactions have a small fee that is shared among the auditors on a pro rata basis. Finally, validators who participate in the oracle process of the Luna exchange rate will receive rewards for the seigniorage.
These rewards are aimed at creating a mining demand that is stable and evergreen in all economic conditions. As the rewards increase, the protocol lowers the network charges and the rewards for seigniorage, and vice versa. For more information on Luna and his rewards, please visit Terra’s Docs website as well as the white paper.
Where and how can I get Luna?
Luna can be bought on cryptocurrency exchanges such as KuCoin or Huobi. You can use the link provided to browse the various central and decentralized cryptocurrency exchanges. Alternatively, the Markets tab of this page also contains a list of all exchanges currently trading Luna Pairs.
How do Terra Stablecoins maintain their price stability?
The Terra network achieves price stability by algorithmically adapting its offer to fluctuations in demand. Once a Terra stablecoin is found to have deviated from its pin, it will apply pressure to correct the deviation.
The protocol uses natural market forces to achieve this. For example, if the price of 1 TerraUSD (UST) is above the US dollar value of US $ 1, the protocol must compensate for this by increasing the UST supply. It mints part of the stable coin and sells it on the open market. Arbitrageurs can then exchange Luna worth 1 US dollar for 1 TerraUSD and profit. The embossing and swapping takes place until the delivery of new UST is sufficient to re-establish the UST binding.
Should the price of 1 TerraUSD fall below its target of $ 1, the protocol will reduce the supply of stablecoins. It shapes Luna and sells her on the open market. Profit seekers can then exchange 1 UST for Luna worth 1 US dollar and pocket the difference. In both cases, the Terra protocol prints as much stablecoin or luna as necessary until the binding is met for each asset.
The protocol thus serves as a market maker for Terra / Luna swaps. As long as there is a certain demand within the Terra ecosystem, depending on either the value of Luna or Terra’s transactions, the exchange of value between the two assets maintains stability and reduces volatility. For more information on Terra’s price maintenance and the role that Luna plays in this mechanism, see the Terra Stability Mechanism page or see his white paper.
Which companies use the Terra payment network?
Terra tries to achieve its vision through two prongs: stability and mass adoption. For the latter, the platform has brought together a group of companies into a consortium called the Terra Alliance, the aim of which is to promote the use of Terra’s payment network in the e-commerce market. The alliance has several well-known players such as TMON, Qoo10, Carousell and Pomelo. In 2019, Allianz had an estimated gross product value (GMV) of $ 25 billion and 45 million users.
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