Terra Luna

Terra is a blockchain founded in January 2018 that launched its mainnet in April 2019. The network was built using Cosmos SDK and focuses on creating stablecoins. Terra’s native token (LUNA) acts as the collateral for Terra stablecoins, which are convertible back into LUNA. This method differs from fiat-backed or over-collateralized stablecoins we typically see.

Luna is also used to pay network fees, participate in the blockchain’s governance protocol, and stake in Terra’s Proof of Stake consensus mechanism. Using Terra Station, you can stake and store your LUNA and participate in the network’s governance. This app is the official wallet and dashboard for the Terra blockchain network.

To peg a Terra stablecoin, the creator must make it convertible to a fiat value of LUNA equal to its peg. For example, a euro stablecoin would be convertible to one euro’s worth of LUNA. This allows arbitragers to profit when the stablecoin moves from the peg and ultimately holds the token at its fixed rate.

You can also earn LUNA rewards by staking your LUNA as a validator or delegating it behind another validator. The rewards from successfully adding blocks are then shared with delegators. To become a validator, you must bond a specific number of LUNA tokens for at least three weeks. However, most average users will find delegating easier and more accessible.

Leave a Reply

Your email address will not be published.