Terra LUNA - The Next Ethereum/Cardano Killer!
Terra is a project with Blockchain technology that does not depend on another Blockchain, that is, it is a complete ecosystem and focuses on DeFI applications. Terra is built with SDK cosmos and the TenderMint Consensus Algorithm.
This ecosystem is based on facilitating the generation of Stablecoins, anchored to the main Fiat currencies of the world. On the Terra platform, each stablecoin can become the Token Luna that is the Native Token of this Blockchain.
One of the main problems of cryptocurrencies or active Crypto is high volatility, if a Blockchain technology is achieved that provides a stable cryptocurrency over time would be more useful than the same current cryptocurrencies such as Bitcoin and Ethereum. Its use would be very varied, as, for example: a means of exchange and value. And this is what this Blockchain Terra poses.
The applications that can be deployed in this Terra Blockchain use Native StableCoin and of course the Token Luna, which is the Token of this Blockchain. The Token Luna is used to collateralize the stablecoins, being used the Token for governance and payments that are generated on the Terra network.
There are many stablecoins that are backed by Fiat, but this Terra project links its native token with the Stablocins, that is, the backrest is the Native Luna Token.
Origin of Terra
The South Korean company Terralabs founded by Daniel Shin and Do Kwon, aimed to revolutionize Blockchain technology, in the world of cryptocurrencies or active cryptos.
This idea arose in 2018, when it was planned to create a Blockchain with a high-speed structure, and that the defined applications developed on this platform could have all the integrated tools, that is, it is a complete Blockchain in its operation, without depending on Another Blockchain.
It is currently well known in South Korea and used as one of the main means of payment in that country, since it has advantages over traditional financial methods. Their transactions are very fast and very economical compared to what traditional methods offer.
Terra Blockchain has other projects such as Mirror Protocol and Anchor Protocol. In 2019 Terra Blockchain was associated with Chia, which is a mobile payment service in South Korea. That is why this platform has become very popular in Korea. People use the UST to buy items in the real world. There are taxi lines that accept payment with UST, by this system.
The Blockchain Terra works thanks to the Proof of Stake Protocol (POS), to be able to process the transactions, vote and validate the blocks, users (validators) should do Staking with their tokens.
In this platform developers can design DAPPS, since it has an advanced SMART contract system, additionally these applications work in the Defi ecosystem, and when using Terra the POS protocol, these DAPPS applications enjoy high speed in transactions and a bass cost.
Terra Blockchain focuses on its raised capacity to run smart contract, deploy or create stablecoin and use in the DeFi ecosystem. Because Terra is built with SDK cosmos and the Token Luna is integrated into the Inter-Blockchain Communication (IBC), it allows Terra to interact with a series of different blockchains, performing cross operations. In this way Terra can have a higher adoption.
Now let's see the following example: If you want to convert your FIAT (150 USD) currency into Terra USD (UST), we know that 150 USD would be equal to 150 UST. To coin or convert 150 UST, it is necessary that they become an equivalent to the Token Luna. Now we are going to assume that the Token Luna has a value of 50 USD / TOKEN. The Blockchain Terra needs to burn the 3 Luna, which is the equivalent of 150 UST.
Having the Token Terra (UST) we can get the Token Luna, let's see the data of the previous example: USD 150 USD or 150 UST, if the price of the Token Luna is 50 USD. This means that, if we want to coin 150 USD of Luna, that is, 3 Luna. And you need to burn the 150 UST. Keep in mind that the rate for the conversion of coñation will always be 1 USD = 1 UST. It may be that in the market the price varies, but for the conversion of mint, it is always the same, and for this reason the Token Terra maintains its stable price.
But what happens if the price of the UST falls or goes up with respect to the USD. We are going to assume that the UST falls to 0.95 USD, that is: 1 UST = 0.95 USD. But as we have said, for the conversion of coining the price is the same, 1 UST = 1 USD. Therefore, with 95 USD I can get 100 UST, but to convert it to Token Luna, the 100 UST Get 2 Luna, and you burn 100 UST Anyone can change those 2 Luna in Currencia Fiat, it sells it for 100 USD and bought At 95 USD, obtaining a USD 5 gain.
Seeing the users who get profits, they begin to make the transactions and sell, which makes the demand increase from the UST when burned and the price of the UST rises and sets on par with the USD.
The Native Token of the Blockchain Terra is Luna, this Token has as a main function maintain the price stability stability of the network. Luna has a stability protocol, handles demand automatically in such a way that stablecoin prices remain stable. This function gives value to the Luna token and many foresee that their price can be climbing.
The Token Luna, native of the Network Terra meets the following uses on the platform:
One of the main functions is to maintain price stability on the Terra network.
The commissions that are generated in the Terra network for the execution of intelligent contracts are with the Token Luna, is a gas system like Ethereum.
If you are holder of the Token Luna, you can participate in the governance of the network. But additional, if you do Staking with your Tokens Luna you can participate in the changes that can occur in the network and participate when creating proposals and voting for the proposals you think are the most effective.
As I mentioned in 2019 Terra was associated with Chai, having this platform a mobile payment application, especially located in South Korea. If you buy by the Chai application, this purchase is processed through the Terra network.
This application has had a high popularity in Korea, for being a decentralized application and has obtained more than one million download on Android. Users earn points and other rewards and can be exchanged in acquiring a product in companies that are chai partners.
Additional, the Chai company offers a debit card (Chai Card), where users can cancel their purchases in different establishments using their tokens. The card is compatible with a lot of establishments. And the great advantage of using this platform is rapidity in the approval of transacies and low cost.
Terra Blockchain has been increasing his participation in the market of cryptocurrency, currently its Token Luna is located among the top 10 cryptocurrencies of the world.
The Network Terra has great potential to be used in different real-life activities, since its operation is based on Stablecoins, resolving the probely of the volatility of cryptocurrencies. The Token Luna plays an important role in the network, as it is responsible for maintaining the balance of the price of the Stablecoins.
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