All You Need to Know About Terra (LUNA) | by EO.Trade | Apr, 2022
Will LUNA be the next DeFi king?
Numerous cryptocurrencies and decentralized apps (Dapps) exist using the nodes of blockchain technology. Where some projects have proved themselves to be worth more than their initial hype, others have managed to attract consumers only with the promise of gains.
Terra (LUNA) is one of such cryptocurrencies that have amassed an impressive market capitalization in a short time. Many investors learned of this token through its dramatic highs and lows in the market, hoping to buy/sell for a profit. But is there more to LUNA?
Launched in 2019, LUNA has witnessed its fair share of dramatic price movements. Still, its steady growth in spite of its volatility makes us wonder if there is a solid project behind the token. Here is all you need to know about Terra (LUNA).
Terra is a blockchain payment interface for stablecoins. While LUNA is the native token of the Terra blockchain. The token has grown more than 2300% in the last two months, outperforming smart contract-focused blockchains.
The terra blockchain works with a similar intent found in other blockchains. It allows users to easily trade, save, and exchange Terra stablecoins on its interface. Terra is both a stablecoin and an open-source blockchain protocol. Terra stablecoin (UST) is the fourth-largest stablecoin in the crypto market. Making the Terra protocol and project a principal part of facilitating blockchain payments.
According to its white paper, Terra combines the price stability and wide adoption of fiat currencies with the demand for bitcoin-backed payments and offers fast and affordable settlements. Its protocol contains two primary cryptocurrency tokens. They include Terra and Luna, and these two share similar attributes. Where Terra acts as a stablecoin, Luna helps in mining and governance.
Understanding Terra’s Role As A Stablecoin
The existential objective of a stable-coin is to retain its purchasing power. Given that most goods and services are consumed domestically, it is important to create cryptocurrencies that track the value of local fiat currencies. Though the US Dollar dominates international trade and forex operations, to the average consumer the dollar exhibits unacceptable volatility against their choice unit of account.
Recognizing strong regionalism in fiat, Terra aims to be a family of cryptocurrencies that are each pegged to the world’s major currencies. Close to the source, the protocol will issue Terra currencies pegged to USD, EUR, CNY, JPY, GBP, KRW, and the IMF SDR.
Terra (LUNA): Price and Performance
The LUNA token is priced at US$105.78 as of 31st March 2022. Its total market capitalization is well over $37.5 billion and counting.
LUNA had its all-time low in march 2020 at a price of $0.1201, and is up by 87,000% in only 2 years!
LUNA vs UST
The Terra LUNA token and (UST) are mutually dependent, as the success of the Terra ecosystem is a function of the adoption of UST as a stablecoin.
LUNA backs UST and is burned when demand for UST rises.
Should you Invest In LUNA?
Based on past and recent performance, LUNA’s ROI is viable. If anything, it is suitable for long-term hodling. However, the value of LUNA can decrease if UST is perceived as unstable, or if its adoption slows.
