Those looking to invest in cryptocurrency are mainly concerned about security and volatility. Thus, many are taking a second look at Terra’s token, LUNA, in its use of a unique algorithm that allows for quick and secure payments, as well as a blockchain technology designed to be more hack-resistant.
Terra has a blockchain network designed to temper the volatility of cryptocurrency assets and uses algorithms to generate stablecoins or cryptocurrencies whose values are stabilized by pegging them to external assets, such as fiat currency or gold.
How does Luna work?
Unlike Bitcoin, LUNA seeks to alleviate many issues currently faced by the world’s top stablecoins. Other than reducing centralization, Terra’s protocol also functions across multiple blockchains, unlike the competition. The network also seeks to remove technical limitations on these assets through its open financial infrastructure that provides the market with self-stabilizing stablecoins and other unique features. To accomplish this task, the network relies on an elastic monetary supply mechanism.
Find out more on the crypto fear and greed index.
What makes LUNA Crypto special?
1. Security
All the transactions are recorded on the blockchain which is transparent and secure. It utilizes DEFI blockchain technology designed to be more resistant to hacking.
2. Less volatility
Compared to other cryptocurrencies or Bitcoin, LUNA coins has a unique algorithm that allows for quick and secure payments and generates stablecoins, or cryptocurrencies whose values are stabilised by pegging them to external assets, such as fiat currencies or gold.
Its blockchain network is also designed to temper the volatility of cryptocurrency assets which could improve price stability.
3. Efficiency in handling transactions
- Interoperability – In September, the network completed Columbus-5, an upgrade that makes the system run on multiple chains, connected by the Cosmos IBC. LUNA tokens currently live on Ethereum and Solana.
- Programmability – The network allows programmers to build smart contracts in Rust, Go, or AssemblyScript. Additionally, you can add extra functionality to your Dapp through the use of the network’s oracles.
- Streamlined Financial – Terra helps to reduce or completely remove the need for credit card networks, banks, and payment gateways with a single blockchain layer.
4. Availability of multiple stablecoins
There are many kinds of Stablecoins one could access at Terra, such as the TerraUSD (UST), which is pegged to the U.S. dollar, TerraKRW (KRT), which is pegged to the South Korean won, TerraMNT, which is pegged to the Mongolian tugrik, and TerraSDR (SDT), which is pegged to the IMF’s SDR unit of account.
5. Environmentally friendly
LUNA Crypto operates on a proof of stake model, where validators verify transactions according to how many coins they hold. Proof of stake is significantly less energy-intensive, does not require purchasing mining equipment, and keeps it running indefinitely, incurring energy costs that can fluctuate, such as in the proof-of-work system.
6. Earn rewards by staking crypto
You can also stake LUNA and earn rewards within the Terra ecosystem. Staking rewards are derived from a combination of gas (compute fees), taxes, and seigniorages. A small percentage fee ranging from 0.1 to 1 percent on every Terra transaction bolsters these earnings.
7. Allows the creation of fungible assets using the Mirror Protocol
Terra can easily allow users to create fungible assets using the Mirror Protocol.
Powered by smart contracts and blockchain technology, Mirror enables the creation of synthetic assets called Mirrored Assets (mAssets). mAssets mimic the price behavior of real-world assets and give traders open access to price exposure without the burdens of owning the actual asset.
Users can mint mAssets in a decentralized manner throughout the network by opening a position and depositing collateral to the protocol to cover the mAssets. Notably, to mint a Mirror asset (mAsset), you simply need to lock up greater than 150 percent of the current asset’s value in Terra stablecoins or mAssets as collateral.
8. Allows the execution of smart contracts through the use of GAS Staking
Similar to Ethereum’s approach, Terra blockchain network uses GAS to execute smart contracts. This mechanism aids in the removal of spam on the blockchain while also providing a layer of incentive for miners to complete these activities.
Governance
Terra network utilizes a community-based governance mechanism where validators gain voting rights regarding vital network updates. Updates can be made to the protocol, such as technical modifications, upgrades, fee adjustments, and more. Community governance mechanisms are beneficial since they allow for consensus in favor of provisions. Any Validator may propose initiatives that will be voted on by the community.
Why is it on the rise?
After crypto advocates have attempted to bring DeFi into the mainstream, they’ve increasingly flocked to Ethereum alternatives. It looks like it’s time for Luna holders; the token has nearly doubled in value over the past two weeks. It’s up 36.5% over the last seven days, rocketing above cult meme-tokens Dogecoin and Shiba Inu.
How to buy LUNA
The LUNA token is available for purchase on the following exchanges: Uphold, Binance, Gate.io , KuCoin, and WazirX. You can also buy cryptocurrency such as Bitcoin or other tokens amongst these exchanges. Find out more on the best cryptocurrency exchanges in Singapore.
How to store LUNA
We advise Luna Holders to use ZenGo, a multi-chain crypto wallet, that could store LUNA with simplicity and bulletproof security. This wallet has 24/7 in-app customer support and its keyless MPC technology gives LUNA owners full control over their crypto.
Controversies
The U.S. Securities and Exchange Commission (SEC) is investigating Terraform over whether it is selling unregistered securities, as it aims to regulate the burgeoning crypto universe. The probe is about Terraform’s Mirror Protocol, which offers synthetic versions of stocks, and not the Terra protocol itself.
Potential On Becoming the New Face of Crypto
LUNA’s market capitalization recently surged by approximately $3 billion, following the recovery of the crypto market and the upcoming Fed decision, which is expected to cause a volatility spike on the crypto market.
It is among Ethereum’s competitors, which also includes number six coin Cardano and number fourteen coin Polygon.
The current price is currently moving in a sharp uptrend in contrast to most of the cryptocurrency market. In the last three weeks, LUNA price added over 64 percent while Ethereum lost around 15 percent.
Learn more on how to buy crypto in Singapore.
Wrap Up
Whether LUNA price could sustain its robust performance remains to be seen. But the confidence of those looking to invest has been boosted with Terraform Labs CEO Do Kwon’s $10 million bet over whether Luna price will be higher or lower in one year.
- Terra’s protocol also functions across multiple blockchains.
- Terra network also seeks to remove technical limitations on these assets through its open financial infrastructure that provides the market with self-stabilizing stablecoins and other unique features.
- Terra users can easily create fungible assets using the Mirror Protocol.
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