Terra is an ecosystem that aims to reduce transaction costs for businesses and individuals through blockchain technology. Investors will also be able to hedge risks using stablecoins.
It is based on a decentralized open protocol. Terra was designed to generate stablecoins to ensure stable prices for global payments systems. As a result, the Terra network tries to combine the borderless benefits of cryptos with the stability of stablecoins. Its algorithm automatically regulates the supply of stablecoins based on their demand. The balance is achieved by stimulating crypto holders to swap LUNA and stablecoins at profitable exchange rates. Thus, the stablecoin supply is either expanded or shortened to match demand.
There are two types of coins in the ecosystem:
- Terra stablecoins: UST, SDT, KRT, and others. Their rates are tied to asset prices. More often, they are tied to specific fiat currencies.
- LUNA cryptocurrency. This is the native protocol coin that regulates stablecoins. It stabilizes their prices. The coin also performs management functions (holders can put forward proposals, vote for project updates) and is used to keep the system running. Stable coins are generated by burning an equivalent number of Luna.
The protocol has high scalability and bandwidth. The average processing time is six seconds.
The total offer is 1 billion coins. This number can be exceeded because the issue is unlimited. However, if more than 1 billion Terra tokens are in circulation, LUNA tokens will be burned until the equilibrium supply level is restored.
Users cannot add new cryptocurrency units via mining, but other means are available to them: exchange purchases, private deals, and exchangers.
The US dollar is the domestic currency of the USA. It occupies a leading position in all central bank reserves. It remains the principal currency of exchange between countries in international trade, as well as the reference currency for payments through payment systems on plastic cards outside the euro-dominated area of the European Union.
Risk warning: Trading in FX and CFDs entails high risk of losing capital.
