What Is Terra Luna | Terra Luna Crypto | What Is Terra Luna Token

What Is Terra Luna | Terra Luna Crypto | What Is Terra Luna Token

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Welcome to our What Is Terra Luna video!

What is Terra Luna?

Terra is the stablecoin standard pegged to fiat and other currencies. For example, TerraUSD (UST) is tied to the United States dollar, while TerraKRW (KRT) is tied to the South Korean won.

The native token, Terra (LUNA) is the network’s staking and governance asset. Users stake LUNA to earn a place in governance and to become validators and obtain rewards. Users can also burn LUNA to mint Terra’s UST token or one tied to their local fiat.

Terra LUNA is a decentralized finance (DeFi) blockchain protocol supporting an ecosystem for users to mint, manage and trade stablecoins that can be tied to any sort of fiat. Additionally, the Terra protocol has expanded to offer support for stablecoin developers to build Terra DeFi projects. The project consists of two cryptocurrencies: Terra and LUNA.

LUNA is the native token of Terra, a blockchain developed by the Korean firm Terraform Labs. A total of $32m was raised to fund this development through the private sale of LUNA coins. Investments came from centralised sources including Binance, Huobi and OKEx.

The founding team was headed by the entrepreneur and investor Daniel Shin, who graduated from Wharton School of Economics in Philadelp[hia and founded HOF, a fintech portfolio company.

LUNA launched in 2019 and for a time was one of the most successful decentralised finance coins. At one point CoinMarketCap ranked it the seventh-largest by market capitalisation. Since the recent crash, it has slumped to occupy the 214th spot as of 1 June 2022.

How does Terra LUNA work?
The aim of the Terra blockchain was to create stablecoins, tokens designed to combine the decentralised freedom of cryptocurrencies with the stability of fiat money. LUNA was a key piece to this system and was described as a staking or protocol token.

The blockchain had implemented a dual token system between the stablecoin TerraUSD (UST) and LUNA to achieve this aim. USTs were minted by burning LUNA and could also be swapped for LUNA.

The idea was that, if the UST value went above $1, the equivalent value of LUNA would be burned, which minted more UST, making it less valuable. Whereas, if the UST price dropped below $1, they were swapped for LUNA, which in turn made UST more valuable.

This relationship has been likened to that between the Moon and the Earth, as they rely on each other for stability. Burning LUNA coin was essential to this dynamic as it incentivised users by giving LUNA its value and, in theory, UST its stability.

Before the crash of May 2022, there was a limit of one billion LUNA coins in circulation and if this number was exceeded, LUNA was burned. As of 1 June, the original LUNA, now renamed LUNC, has a circulating supply of 6.5 trillion, according to CoinMarketCap.

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The information contained herein is for informational purposes only. Nothing here shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.

I hope you found value in our What Is Terra Luna video. Make sure to leave a like on the video if you gained value from it!

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⏰ Time Stamp ⏰

00:00 Intro
00:37 What is terra
02:32 Outro

Видео What Is Terra Luna | Terra Luna Crypto | What Is Terra Luna Token канала Crypto Trend