Why is Terra (LUNA) crypto catching attention?

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Why is Terra (LUNA) crypto catching attention?

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 Why is Terra (LUNA) crypto catching attention?
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Highlights

  • Terra is a blockchain protocol. 
  • It develops the Terra Luna (LUNA) blockchain and the stablecoin TerraUSD (UST).
  • On April 14, Terraform Labs (TFL) donated 10 million LUNA coins to the Luna Foundation Guard (LFG) to support the Terra ecosystem’s development.

On April 14, the Seoul-based Terraform Labs (TFL), the creator of the Terra ecosystem, said it donated another 10 million LUNA tokens to the Luna Foundation Guard (LFG) to support its development.

The foundation supports the Terra ecosystem and its stablecoin TerraUSD (UST). In March this year, TFL donated 12 million LUNA tokens to LFG, worth around US$1.2 billion. Terra CEO Do Kwon announced it on Twitter. Kwon said the tokens would be burned for minting USTs to boost the company’s stablecoin reserve. 

After the news, the Terra (LUNA) crypto rose 2.00% to US$85.75 at 7:43 am ET on Thursday.

What Is Terra (LUNA)?

Terra is a blockchain protocol. It uses fiat-pegged stablecoins to power its price-stable global payments systems. Its native token, LUNA, is a governance token and is also used to stabilize the price of its stablecoin, UST. 

Terra aims to offer the combined benefits of cryptocurrencies and the price stability of fiat currencies. The protocol keeps the one-on-one peg with an algorithm that automatically adjusts the supply of stablecoin as per the demand.  

Founded in 2018, Terra adjusts supply according to demand by offering incentives to LUNA holders to swap LUNA and stablecoins at profitable exchange rates.  

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Why is Terra (LUNA) crypto catching attention?Data Source: coinmarketcap.com

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Terra (LUNA) token:

Terra’s two tokens, LUNA and UST, are mutually dependent. LUNA backs UST. The token is burned when the demand for UST rises. Burning US$1 in LUNA means minting US$1 in UST and vice versa. New LUNA tokens are minted to maintain the price of Terra stablecoins. It is done through the protocol’s algorithm.

With a market capitalization of US$30.99 billion, the token is ranked 9th by market capitalization. It has 1435 token holders. 

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The token’s trading volume surged 10.26% to US$1.9 billion in the last 24 hours. Its current circulating supply is 361.6 million out of a total supply of 745 million. The token can be purchased on OKX, Bybit, Phemex, FTX, and Binance crypto exchanges. Recently Binance US has also listed Terra’s stablecoin UST. 

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Bottom line:

The crypto market is volatile and prone to hacking threats. Hence, investors should apply due diligence before investing in digital assets.

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