A cryptocurrency called LUNA? Yes, it exists!… It is a cryptocurrency designed by Terra Protocol; those responsible for also considering the objective of creating a programmable algorithmic stablecoin available on each Blockchain.
In the crypto universe anything is possible. The word earth comes from the Latin: terra. And the project we are referring to is called Terra and its currency is LUNA: So officially we can say that the Earth created the Moon!
Today we will be talking about how the crypto project named after the planet and its satellite was made. In the time that this ambitious initiative has been operating, it remains one of the demonstrations of the cryptographic and technological boom that is gaining greater reach. Basic data
Link in CriptoMercados: Terra (LUNA)
Function: Digital money / Stablecoin.
Creator(s) and Developer(s): Daniel Shin and Do Kwon.
Responsible organization: Terraform Labs.
Release date: April 2019.
Type of issue: Limited. Terra has an offer of 1 billion tokens. If this number is exceeded, LUNA burns until it returns to the balanced level of supply.
Consensus algorithm: The platform uses a proof-of-stake (PoS) consensus algorithm.
Logo:Moon logo on TwitterBefore going to the Moon, let’s talk about Terra
Terra was created by a South Korean blockchain company called Terraform Labs, founded by Daniel Shin & Do Kwon in January 2018. In turn, Terraform Labs was incubated by Terra Alliance, a conglomerate of 15 e-commerce companies in South Korea and Southeast Asia.
In summary, Terra is a Blockchain protocol focused on stablecoins, since its development aims to strengthen the infrastructure of stable payments and decentralized finance (DeFi). In other words, Terra seeks to create a programmable algorithmic stablecoin for each Blockchain.
In addition, the project currently relies on a set of stablecoins that are pegged to various fiat currencies. And if we think about it, by releasing stablecoins related to the price of fiat currencies, Terra immediately becomes a part of the digital central bank.
Similarly, another part of the system helps replace today’s complicated and expensive payment chain that includes banks, payment gateways and credit card networks. In this way, Terra provides efficiency to merchants and consumers, while continuously improving the infrastructure and tools of the ecosystem to finally reach a transparent, distributed and credibly neutral payment system. StableCoin Family
Currently, members of terra’s stablecoin family include: KRT (pegged to the Korean won), UST (pegged to the US dollar), MNT (pegged to the Turkish currency of Mongolia), SDT (with the SDR Organization of the International Monetary Fund). Obviously the creators plan to add more stablecoin in the future. If Terra created Luna: Who created Terra?
We already mentioned them, Daniel Shin and Do Kwon. The two conceived of the project as a way to drive the rapid adoption of blockchain technology and cryptocurrencies through an approach based on price stability and usability.
Do Kwon holds a degree in Computer Science from Stanford University and entered the Forbes 30 Under 30 list in 2019. Prior to Terraform Labs, he worked as part of Microsoft’s natural language processing team and then founded a startup called Any-Fi that specialized in peer-to-peer telecommunications solutions, such as mesh Wi-Fi networks.
For his part, Daniel Shin is a graduate of the Wharton School of Economics and is also the founder of four Korean companies, including an e-commerce platform called TMON, a startup incubator called Fast Track Asia, and the Chai payment app. This application deserves a deeper look, since in conjunction with Terra, they become crypto dynamite! Terra and her sister Chai
Terra has established several partnerships with payment platforms, particularly in the Asia-Pacific region. In July 2019, Terra announced a partnership with Chai, a South Korea-based mobile payments app, in which purchases made with the app on e-commerce platforms are processed through Terra’s blockchain network.
This is how Chai is currently Terra’s most popular application, it is actually a widely used crypto decentralized application, registering almost 100,000 users per day, and has exceeded one million downloads for Android.
Users can accumulate points that can be redeemed for commercial rewards with Chai partners. These partners include TMon, Qoo10, Yanolja, Megabox and Musinsa, which offer benefits in exchange for marketing promotion to Chai.Chai’s member base and daughter Chai Card.
So, we can intuit that one of the key elements of Terra is the Chai payment application. But it doesn’t end there!
The company also offers a debit card called Chai Card, which launched in June 2019. Thanks to this debit card, users can pay in the different establishments using their tokens.
LUNA is the native token of the Terra network, which is used to secure the network, governance and collateralization for the price stability of stablecoins. That is, LUNA is nothing more and nothing less than the backbone and the base of the entire Terra network and ecosystem.
Unlike other decentralized stablecoins, Terra’s stablecoins are not guaranteed per se. To mint a Terra stablecoin as a UST, you must burn the equivalent dollar amount of Terra’s native currency, LUNA.
For example, if a user wanted to mint 10 UST and the price of LUNA was $10, then they would only need to burn a LUNA. What’s even more incredible is that you can also burn Terra stablecoins to redeem the equivalent value of LUNA.
If a user had 10 UST and the price of LUNA was $5, they would get 2 LUNA for burning that UST. This creates a smart financial incentive that ensures that Terra’s stablecoins always maintain their fiat parity. This delicate balance between the stablecoins of Terra and LUNA is meant to be analogous to that of planet Earth and its satellite, the Moon, which depend on each other for gravitational stability and rotation. Image from UnsplashTechnical Features of Terra (LUNA)
Terra seeks to differentiate itself through the use of stablecoins pegged to fiat currencies, claiming that it combines the benefits of cryptocurrencies with the daily price stability of fiat currencies.
Like the rest of the stablecoins, it stabilizes algorithmically thanks to the native asset of the Terra Blockchain: the LUNA token. In addition, as these stablecoins are pegged to fiat currencies, let’s remember that Terra becomes like a kind of digital central bank. In addition, thanks to this protocol, transactions can be made without having to face high costs and without waiting days or weeks.
For example, the Terra blockchain is capable of reaching hundreds of transactions per second. And Terra transactions are usually settled in six seconds and their execution only costs a few cents. The Terra Protocol, with its balance between fostering stability and adoption, represents a significant complement to fiat currencies as a means of payment and store of value.
In addition, the founders are legitimate and Terraform Labs is constantly innovating, so much so that they have come a long way since Terra’s core network was launched in 2019. As icing on the cake, let’s remember that the Terra blockchain has also been used and adopted by various e-commerce applications and platforms in Southeast Asia. Market behaviour
LUNA was born in February 2019 and allowed the team to raise $72 million by selling tokens at $0.80 each. That turned out to be profitable for early investors when the LUNA token started trading in September 2019 around $1.30.
Subsequently, the LUNA token entered a steady decline that eventually took it to its all-time low of $0.1199 in March 2020. The token regained its strength, rising in July and August 2020 and almost reaching $0.60.