A Simple Introduction to Terra

What is Terra?

  • Proof of stake blockchain focusing on a mass payment processing system and the creation of stablecoin
  • Terra caps fees at 1% for payment processing, and is usually lower than 1%
  • The advantage of Terra is their stablecoin algorithm
  • For a merchant, using BTC and other alt coins has a price volatility risk; price can quickly go up and down depending on the markets
  • Stablecoins are pegged to fiat currencies: Learn more about StableCoins here
  • For Terra, Luna is used to maintain the stable value of Terra
  • Used to burn or to create more UST to peg UST at $1 USD
  • Example: If Terra > $1, then they make more Terra by incentivizing holders of Luna to trade in Luna for Terra for a small profit. In the opposite scenario, Terran incentives holder for Terra to trade their Terra for Luna for a small profit.

Use Cases

  • Simplifying transitions by using stable coins
  • Mirror protocol: Used creation of mAssets; token to represent or mirror another asset (e.g. mETH to represent ETH) but it can be any crypto or real assets
  • Anchor protocols: basically, a saving accounts that currently earns APY of 19%. You deposit UST and you earn yield that is compounded daily.

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Hi! I'm

Ricky Young

My belief is that financial freedom can only be achieved through a combination of smart investing and passive income. This is my journey to achieve financial freedom.

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