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Friday, April 19, 2024

Terra Defi Coin Review: Terra stablecoins offer Instant Settlements

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About Terra Defi Coin

Terra Defi Coin is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems. According to its white paper, Terra combines the price stability and wide adoption of fiat currencies with the censorship-resistance of Bitcoin (BTC) and offers fast and affordable settlements. Terra is a blockchain protocol that supports stable programmable payments and open financial infrastructure development. It is supported by a basket of fiat-pegged, seigniorage share style stablecoins which are algorithmically stabilized by its native cryptoasset, Luna.

Development on Terra began in January 2018, and its mainnet officially launched in April 2019. As of September 2020, it offers stablecoins pegged to the U.S. dollar, South Korean won, Mongolian tugrik and the International Monetary Fund’s Special Drawing Rights basket of currencies — and it intends to roll out additional options. Terra’s native token, LUNA, is used to stabilize the price of the protocol’s stablecoins. LUNA holders are also able to submit and vote on governance proposals.

Bolstered through the initial mass adoption of Terra’s blockchain infrastructure powering its partner, CHAI, which has amassed over 1.3 million users to date, Terra moves naturally towards ecosystem building that offers competitive programmable payments, logistics, and infrastructure to power the plethora of industry that will be built on efficiency and scale.

Terra Defi Coin Project Facts

Defi Coin NameTerra Defi Coin
Short Name LUNA
Platform Decentralized Finance
Ethereum ContractN/A
WhitepaperClick Here To View
Circulating Supply484,776,063 LUNA
Official WebsiteClick Here To Visit

Most Powerful Platform

Terra supports smart contracts, enabled by CosmWasm technology. Developers are able to:

  • Build smart contracts in Rust, Go, or AssemblyScript
  • Run on multiple chains, connected by the Cosmos IBC
  • Use Terra stablecoins, onchain swaps, layer 1 oracles as primitives
  • Expose dApp userbases to Terra’s payment services in a permissionless fashion

What is Luna?

Luna is the native staking token recognized by the Terra protocol. Through its role in collateralizing the mechanisms that secure the price-stability of Terra stablecoins and modulate the incentives of validators, Luna serves as a foundational asset for the entire Terra network and ecosystem.

Take a closer look

Read the terra white paper

Latest research discussions

Learn how to build on Terra

Terra Markets

Terra Defi Coin Review: Terra stablecoins offer Instant Settlements

Price Stabilization

Terra achieves price-stability by algorithmically adjusting its supply according to fluctuations in demand. For instance, an increase in demand in Terra manifests in an increase in the volume of Terra transactions and as well as a surge in the price of Terra. As a result, Terra must apply some balancing, reactionary force to ensure that its price does not deviate from its peg. In this scenario, the supply of Terra must increase to compensate for the extra demand. This is known as expansion.

The protocol needs to mint and sell Terra to introduce it into the market. Terra achieves this by natural efficient market forces, through the opportunism of individual arbitrageurs who can extract risk-free profit by purchasing 1 newly minted TerraSDR (worth more than its peg) for 1 SDR of Luna, banking on the difference. In essence, the value associated with the increased demand in one unit of Terra is spread out across newly minted Terra, collateralized by the Luna used to purchase it. This recaptured value in Luna, now owned by the system, is called seigniorage and represents the profit gained from minting Terra (and it costs next to nothing to mint!).


Governance is the process by which Terra network participants can effect change for the protocol, by collectively demonstrating consensus support for proposals.

How Is the Terra Network Secured?

The Terra blockchain is secured using a proof-of-stake consensus algorithm based on Tendermint, in which LUNA token holders stake their tokens as collateral to validate transactions, receiving rewards in proportion to the amount of LUNA staked. Token holders may also delegate others to validate transactions on their behalf, sharing in any revenue generated. Terra also offers additional guidance to validator nodes on the best practices for helping to keep the network secure.

In May 2019, shortly after Terra’s mainnet went live, blockchain verification and penetration testing firm CertiK completed a security audit of the network. It examined its economic model to test against market manipulation, its architecture and its coding language. CertiK found that the “modeling and mathematical reasoning” of the Terra network were “considered sound,” although it would not comment on the blockchain’s performance.

Where Can You Buy Terra (LUNA)?

Terra’s native token, LUNA, is listed on several cryptocurrency exchanges — including HuobiBitfinex, and Upbit — where it is available to be traded against fiat currencies, stablecoins and other cryptocurrencies. Are you interested in buying LUNA or other cryptocurrencies such as Bitcoin? CoinMarketCap has a simple, step-by-step guide to teach you all about crypto and how to buy your first coins.

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