new Delhi: Stablecoins have recently gained prominence in digital currency circles. Terra is one of them.
As cryptocurrencies such as Bitcoin, Ether and Dogecoin have become relatively volatile over the past few months, crypto investors are now moving to invest in stablecoins such as Terra due to their more predictable prices.
According to news reports, many crypto enthusiasts have invested in stablecoins due to their more predictable and stable prices.
What is Terra?
The Terra algorithm is an open-source blockchain platform for stable coins that are pegged against traditional fiat. Terra’s native currency LUNA is a versatile token in the network that has been extremely important in the rise of the Terra platform.
These cryptocurrencies include the Tera US Dollar or UST, which is pegged to the US Dollar via an algorithm.
According to a report by The Fortune, Terra is a stablecoin that aims to reduce spatial volatility for cryptocurrencies like bitcoin. Unlike another stablecoin, Tether, an algorithmic and related reserve token, is pegged to a more traditional currency like the US dollar through cash and cash equivalents.
In 2018, Do Kwon and Daniel Shin founded Terra. Kwan is also the CEO of TerraForm Labs, the company that built the Terra Protocol and ecosystem.
Why is it in the news?
The value of Terra almost doubled in February, rising from a low of $47 to $91. The reason behind the increase in its value is the conflict between Russia and Ukraine.
According to news reports, the Terra ecosystem is a rapidly growing network of decentralized applications, resulting in continued demand for Terra and increasing the price of Luna. On the Terra Blockchain, users can spend, save, trade and swap the Terra stablecoins.
The current price of Terra is $95.93 at 12.30 pm on Monday.
How does this work?
According to a report, Terraform Labs does not make money from transactions using its crypto. It relies on external funding to operate, Kwon said. According to deal-tracking service PitchBook, it has raised $5.7 million from investors such as Hashqi Digital Asset Group, Divergence Digital Currency Fund and Huobi Capital.
What is Luna?
Terra’s cryptocurrency is called Luna. It allows holders to pay network fees, participate in governance, stake in the Tendermint Delegated Proof of Stake consensus mechanism, and peg stablecoins.
According to data from Coinmarketcap, with a total market cap of over $34 billion, it is the ninth largest cryptocurrency, leaving behind Polkadot and Avalanche. Luna is up 12,000 percent over the past year, down from $1 at the start of the year.
You can buy LUNA through Binance and then store it, stake it, and participate in governance with Terra Station, the official wallet and dashboard of the Terra blockchain network.
LUNA holders can stake their tokens in the consensus mechanism of the Terra ecosystem. By betting LUNA, users receive rewards derived directly from swap fees on the Terra Protocol. Users pay these fees any time they switch between LUNA and the Terra stablecoin.