Terra is a next-generation, decentralized blockchain protocol that supports stable programmable payments and open financial infrastructure development. Terra protocol is run by stablecoins, which are algorithmically stabilized by its native token, Luna. LUNA is the ticker of the native token offered by the Terra protocol.
Terra protocol offers stablecoins, providing instant settlements, low gas fees, and seamless cross-border transactions without friction. Terra's architecture algorithmically changes the supply of Terra and LUNA to keep the prices stable.
LUNA's primary function is to act as a stabilizing mechanism for the stablecoin, Terra and safeguard the protocol by locking the reserve supply within the system through staking.
Its Proof of Stake (PoS) consensus mechanism supports the network and incentivizes validators with staking rewards. Staking rewards are determined by factors such as the size of the stake, and there is a direct correlation between rewards and transaction volume. As the transaction volume increases, the rewards are proportionally higher.
Terra also has other Protocols, the most popular ones being Anchor Protocol and Mirror Protocol. The former is high-yield savings account for holders, while the latter is used to generate synthetic financial assets like tokenized stocks. It also allows new cryptocurrencies and other financial apps to be built on the protocol to push global adoption.
LUNA price and tokenomics
LUNA's tokenomics is unlike other cryptocurrencies. The supply is limited to 1 billion, and if it crosses this number, the protocol's algorithm starts burning tokens to stabilize the LUNA price.
The company held a series of private sales in early 2019. There was no public ICO, so they raised money from private investors, including Huobi, and other venture capital firms. The allocation is limited to 4%, or 40 million tokens, for genesis liquidity. Subsequently, for stability reserves, the company allocated 200 million initial tokens.
LUNA charts show constant progression in value. Although staking is not lucrative due to low fees, over 30 percent of the supply is projected to be locked in staking, which significantly lowers the selling pressure on any exchange.
About the Founders
Terra was founded in 2018 by Daniel Shin and Do Kwon. Kwon later took on the position of CEO. Kwon is a computer scientist who previously worked as a software engineer for Apple and Microsoft. He founded Anyfi, a startup providing decentralized wireless mesh networking solutions, and headed as the CEO.
On the other hand, Shin is an entrepreneur with a background in e-commerce. He co-founded several other companies before Terra, including Fast Track Asia and Ticket Monster.
Terraform Labs, the company behind the public blockchain, has received strong support from investment firms and raised $150 million in Q2, 2021.
The significant investors participating in the funding are Arrington XRP Capital, Pantera Capital, Galaxy Digital, and BlockTower Capital. Even Coinbase Ventures contributed to the funding round and expects the company to build more apps on its Tendermint-based blockchain.
