During the three-month run of Terrace (LUNA), the token rose by 674%, placing the LUNA device among the so-called Ethereum potential killer. LUNA has been crying lately because the latest Terra update, Columbus-5, effectively changed tokens and made major changes in technology.
LUNA is currently ranked 4th by Total Blocked Value (TVL) among other blockchains, which indicates its growing popularity of decentralized financial (DeFi) applications and also supports its long-term viability.
Terra is a single-blockchain developed by the South Korean startup Terraform Labs and released in January 2018. It has a coin-driven payments oriented ecosystem with an algorithm stack and aims to be the infrastructure for all applications created by Terraform Labs. and Terra communities.
Real Gadgets Terra is already making money, especially among sellers. Arrington Capital, Lightspeed Venture Partners and Pantera Capital have committed nearly $150 million to fund projects in Terra.
Balcony moving parts
Terra is built with Cosmos, which uses a consensus mechanism that has been delegated to Tendermint to take action. This allows it to scale to thousands of transactions per second with near-instant completion, with much lower fees compared to Ethereum. Cosmos is seeing the use of other big projects such as Binance Chain, Crypto.com, and Cosmos Hub.
According to Terra Analytics, Terra currently has 139 auditors, with a total of 341 million LUNAs invested.
An important part of the Terra blockchain is that it uses a dual token system that includes Terra (LUNA) and TerraUSD (UST). LUNA acts as a protocol utility token, and UST is the original stack currency.
LUNA tokens guarantee the stability of earthly vaults and other coins. On the other hand, floor tanks are an arithmetic stablecoin that was introduced in September 2020. This means that floor tanks do not require any central or secure support, which helps to avoid dependence on central units and other centralization problems.
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This differs from other stablecoins linked to assets such as the US dollar, where the value of the UST against the dollar is maintained by the constant burning of similar LUNA tokens. In other words, ground tanks are created by burning an equal number of LUNAs.
For example, if the price of the floor cabinets exceeds $1, the algorithm will burn more LUNAs to create the floor cabinets and return the value to $1, and conversely, if the price is less than $1, the floor cabinets will be converted to LUNA to support the price.
Terra . ecosystem
Terra is gaining ground in the DeFi scene, and the entire ecosystem revolves around TerraUSD. Three major decentralized applications (DApps) are already using stablecoins, including Mirror, Chai, and Anchor.
Mirror is a synthetic asset protocol that simulates the stock markets of the world and allows users to invest even if they do not have continuous access to those markets. On the other hand, Chai is similar to an e-wallet for fast and cheap mobile payments in Korea, but it also plans to expand to other Asian countries such as Singapore, Thailand and Taiwan. Finally, Anchor is a savings protocol that gives users a stable income investment based on floor-to-ceiling tanks. Anchor was introduced in March, but quickly became a popular crop and ranked third after Aave and Compound in TVL.
Terra’s long-term value is based on the utility of LUNA and the blockchain infrastructure. Terraps in the Terra ecosystem are designed to increase the demand for terrestrial tanks, reduce the supply of LUNA, and increase their value in the long term.
In August 2021, the inclusion of LUNA and TerraUSD on Coinbase Pro was supposed to be one of the catalysts for growth, since previously LUNA could only be traded on a few small exchanges.
Another catalyst is the anticipation of the Columbus-5 update, which brought significant changes to the Terra, allowing for increased scalability and interoperability across the chains. The price of the LUNA has gone from less than $10 in July to nearly . According to Cointelegraph Markets Pro, it has a market capitalization of $41 on October 6 and already has a market capitalization of over $18 billion, making it the 11th best cryptocurrency.
It is believed that the Columbus-5 update on September 30th will bring several new projects to Terra, which will put more deflationary pressure on LUNA coins and serve as an argument for a more optimistic valuation.