LUNA (or Terra Luna) was born with the intention of redirecting the cryptocurrency market. Well be improving payments DeFi or other aspects that do not convince consumers today. This cryptocurrency belongs to the Ada Cardano club, Polkadot y Solaria: They are in a perfect position to eat the market of the altcoins. Terra Luna has experienced a wonderful summer of 2021 in which it has practically quintupled its value, going from cost seven dollars to thirty-five, according to CoinMarketCap.
It should be noted that the Terra blockchain is not much different from the rest. Is he how they sell the token what has driven this coin in the market. Many people dare to declare that LUNA is profitable, reliable and safe. However, is this true? Next, we are going to delve into Terraform Labs in order for you to understand why Terra Luna has a promising future.
Terra Luna: How reliable is it? The Source of More Efficient DeFi and Stable Payments
In the next few paragraphs you will learn what it is and what are the characteristics that make it easier for Terraform Labs to position itself in the market.
Why is LUNA so relevant?
Terra is a blockchain protocol created for the purpose of improving DeFi infrastructure and stable payments.
This system relies on stablecoins that are linked to fiat currencies. But the stable value is kept due to the native token of the Terra network and the algorithm.
A relevant aspect of this blockchain is that Terra is part of the digital central bank. Reason why much of LUNA's technology is used to make payments:
- To credit card networks
- To payment gateways
- And various banks
The system provides an infrastructure able, speed boat tour y tailored to merchants and consumers alike. Improving the mechanism and tools involved progressively. In this way they try to become a neutral, transparent and distributed payment system.
On the other hand, LUNA is propelled by mass adoption, employing CHAI: a South Korean payment gateway. (Which has 2 over millions of users assets.)
Because of this advantage, the Terra development team hopes to expand. Achieving position as the virtual currency used number one in Asian countries.
What is the purpose of LUNA and the Terra network?
Most cryptocurrencies have abnormal price fluctuations. This inconsistency is the main obstacle preventing the acceptance of virtual currencies as conventional payment option.
In addition, it affects not only investors, but workers. The largest percentage of people do not want to be paid with a coin that can drop between 10-20% in less than 24 hours.
They are scared of losing their money, which implies security of your savings short term. This feeling is intensified when they receive late payments. (Such as mortgages and wages.)
Consequently, using cryptocurrencies is counterproductive for most. And therefore, they have not made significant progress in this area.
Terra, unlike the rest of the currencies in the market, seeks to maintain its stable value linking to fiat money.
However, the development team comments that price stability is not the only thing that will encourage mainstream adoption. Rather, it depends on other factors, such as:
- The utility for consumers. If the cryptocurrency cannot be used as an "object" of exchange to pay: debts, necessities or luxuries, it does not matter how stable it is.
- And the utility for business. If banks, companies, etc., see that the currency is lacking in considerable demand, they will not consider it as a general means of payment.
This vicious cycle is the reason for the slow adoption of Bitcoin as a transactional currency. And it is an aspect that the Terra algorithm tries to improve.
Why is LUNA capturing investors' attention?
La elastic monetary policy is the ace up the sleeve of Terra Protocol. Being an easy and effective solution to stabilize the cryptocurrency, in the company of strong fiscal policy. (Working in harmony, both are capable of driving the rate of adoption of new currencies.)
For this reason they became associated with a Treasury. As an attempt to create an efficient fiscal spending regime, supported by direct stimulus programs.
The network's native token, LUNA, is used to secure collateralization, governance and network. Its purpose is to try to prevent the price of stablecoins from fluctuating abnormally, as most of the market has. For this reason, LUNA is considered la network base y the ecosystem same.
The Poof-of-Stake Consensus and Its Rewards on the Terra Network
This cryptocurrency secures the network through the Proof of Stake, which carries a series of rewards for exercising LUNA Staking. Although the least attractive aspect is the imminent volatility of the price of the token through this process.
Network validators receive the rewards first. Taking a commission before passing the rest to individual delegates. (The amount attributed to each depends on the size of the operation.)
On the other hand, the more people are using the network, the greater the benefit attached to both. Since it comes from the commissions of each transaction.
It should be noted that anyone who be the owner of Terra Luna can become a validator. Either for pleasure or a specific reason.
The 3 states of the MOON
Among the most characteristic features of this coin, its three states can be highlighted:
- Unlinked mode. Once this stage is activated, are completely removed staking rewards. And you can't trade LUNA left and right either. It usually lasts 21 days; after this time, they become unbonded.
- Unbonded mode. There are no problems in trading your tokens freely and without restrictions.
- And linked mode. In this case, you have the tokens stake for PoS, so you cannot trade them. They are blocked by the system. Also, as long as they are linked, produce benefits for validators and delegates.
Why does the Terra network emphasize validators?
Thanks to the Tendermint consensus, there is an amalgam of validators that secure the network. These run full nodes or work in order to improve the blockchain consensus.
And since they take care of create new blocksBased on the information they receive, they are rewarded.
Furthermore, one of the most relevant aspects of being a validator is the fact that can vote in governance. Not to mention your influence on the network, based on your entire participation.
Today it is estimated that only a hundred validators are the ones with the greatest weight in the network. This is because Terraform Labs encourages them to perform well, be efficient, and not make mistakes.
If they do their job badly, they are penalized. Among the most common mistakes they can make we can distinguish:
- Sign twice
- Disconnect frequently
- Or risk the safety of users
On these occasions, LUNA tokens operating are trimmed per protocol. Including cryptocurrencies bet by delegates. And by penalizing bad behavior or negligence, the network becomes more efficient.
Role of delegators for Terra Luna
Delegators have access to Terra Station (the website dedicated for this activity), where they can entrust their tokens to a validator. And when this has good performance, they acquire interest for each operation.
However, the responsibilities of the delegator increase. They don't get to the validator level, but they do connect in a certain way. For example, when they are penalized for negligent behavior: it directly affects the delegator.
For this reason, must be studied and evaluated Who do you bet your Terra Lunas on. In fact, specialists advise that you always distribute your participation among several validators. Since, although it seems a passive activity, delegates play an essential role.
They are responsible for maintaining good network performance. In this way, when a validator is not performing the activity as it should, all the tokens appended to its name are removed. (It will stimulate you to improve.)
What is the future of LUNA?
In the world of cryptocurrencies, investors are keeping an eye on the development of new tokens. Since various protocols of the new generation they have been lucrative short term.
And LUNA falls into this category: overnight, the token has increased in value by almost 40%.
In fact, one of the most seductive aspects is that the evolutionary line has remained in an uptrend, with little fluctuation. (Despite obvious market inconsistencies.)
Starting November 2020 it only went up to $ 0,28 USD. Today, it has managed to exceed $ 28 USD in value.
On the other hand, LUNA enjoyed the active participation of the public in the ecosystem since its debut on the international exchange KuCoin. This has made it safer and more reliable than other currencies.
According to the co-founder of Terra, Daniel Shin: “After the appearance of LUNA in the market, the pace of operations has not stopped growing in an accelerated manner. In fact, the number of users that we have registered in just a few months exceeds 400.000. "
He also remarked that the intention in the coming months would be improve systems within the same company: “We seek to expand Terra's economy as we expand our e-commerce partnerships. Ensuring that, every day, there are more stores that accept it as a means of payment. "
These are the 2 reasons why Terra is so popular
People's interest has grown for the concept of stablecoins, improving the state of the market, and new partnerships. Three aspects that support the uptrend of LUNA.
Your innovation
“Lower-level” altcoins continue to rise, while altcoins like Bitcoin remain stagnant. This drives the growth of LUNA. Especially when the team tweets on their official account the updates released in 28 days.
Terra not only reached investors, but also expanded to new e-commerce and integrations that make it:
- Twice as safe
- Twice as fast
- And twice as reliable
In fact, among the most important events that have revolved around the coin in June 2021, we have the debut of the second version of Mirror. In addition to the inclusion of the token on the Crypto.com platform and the yield farming opportunities in Dfyn.
On the other hand, on July 7, the company responsible for LUNA, Terraform Labs (TFL), was committed to using 50 million of Terra SDT. (For the price of UST 70 million from TFL's stability reserve fund). In order to use the Anchor or ANC protocol to your advantage.
This effort was made to introduce new types of guarantees and increase the performance of the self-sustaining network. Therefore, it is worth providing a 20% interest to UST stakers in the Anchor protocol.
Your connections
Terraform Labs' partnerships with other platforms do not end. More and more investors and entrepreneurs are applying it in their business model. Like, for example, the Harmony protocol (ONE.)
But not all the benefits were monetary: this grouping will allow stablecoins operate on different blockchain networks safely, reliably and efficiently.
This is why trading has become so prevalent since the Galaxy Digital investment. Whose approximate amount exceeds 20 million euros. All in order to improve the infrastructure of Terraform Labs, the headquarters responsible for Terra Luna.
On the other hand, Galaxy Digitel alleges that Terra is a Sandbox project that is coming out of the Sandbox. "The innovation y address by which the developers are governed promoted the probability of providing a real solution to the consumers of this cryptocurrency. That's what we are looking for."
