Terra is built on top of the Cosmos SDK and uses the Tendermint Delegated-Proof-of-Stake (DpoS) consensus mechanism.
Sciencelovers - Being one of the coins growing in the midst of a correction storm, Terra (LUNA) has attractive fundamentals behind it to bring the outlook even higher.
The crypto market in the majority is currently still trying to recover from the intense correction, while LUNA is still doing well and is heading more north.
Terra Coin Potential (LUNA)
Based on a report from CryptoGlobe, Friday (12/31/2021), CEO of Pantera Capital, Dan Morehead, has seen the very slick potential of the LUNA coin.
According to him, Terra is a promising project and has a lot of potential for growth.
Of course, this potential still looks great after the price of LUNA jumped dramatically throughout 2021, appreciated by 13,700 percent.
A soaring market cap of US$31 billion brought LUNA to the ninth position, the largest cryptocurrency by market cap on CoinMarketCap.
Morehead also sees that Terra has grown very, very fast and still looks attractive for 2022.
“This is one of the most promising coins for the coming year because, so many people will start discovering it and just start trading it,” he said.
For your information, Terra is an open source blockchain payment platform that accommodates algorithmic stablecoins, of which the largest is TerraUSD (UST).
It runs on Proof-of-Stake (PoS) consensus, and its native token LUNA, which is used in stablecoin issuance (TerraSDR), as a price stability mechanism, as well as for staking and governance.
The way it works is, new stablecoins can be minted by burning LUNA tokens, and stablecoins can be burned to mint LUNA.
The protocol uses an algorithmic marketplace module to maintain the stability of stablecoins. The price of LUNA exploded this year along with the supply of stablecoin UST.
In addition to the slick performance, Morehead also sees that Terra is starting to expand its reach from the stablecoin side.
“[Terra] is starting to gain traction in the South Korean gaming market and it's one of the leading markets for games in the world so it's starting to expand from stablecoins to do much more interesting things,” he added.
However, 2022 is still considered to be bringing a new breath of fresh air to the crypto industry. So, this still needs to be looked at carefully.
Get to know Terra more
This protocol was developed by Terraform Labs in January 2018, founded by entrepreneurs Daniel Shin and Do Kwon. The main components in the Terra ecosystem are the stablecoin called Terra currency as well as the LUNA regulatory token.
Terra's main product is TerraUSD (UST), a stablecoin pegged to the US dollar. As the fifth largest stablecoin on the market, UST is one of the fastest growing assets and reached a market cap of US$2.5 billion just a year after its launch.
The Terra stablecoin uses an elastic monetary policy to ensure price stability and growth. This means that the Terra stablecoin achieves a stable price by adjusting supply based on changes in demand in real-time.
Terra is built on top of the Cosmos SDK and uses the Tendermint Delegated-Proof-of-Stake (DpoS) consensus mechanism. Currently, the protocol involves 130 validators sorted by staking amount. The main role of the validator is to verify, complete transactions and secure the network by running full nodes.
In addition to validators, LUNA token holders can delegate their tokens to validators to become delegators. Both the validator and the delegate have the same responsibilities and risks. Both have the potential to suffer losses if the validator attempts to attack the network.
With several hundred validators, Terra is not the most decentralized blockchain.
Similar to other DpoS blockchains namely Cardano, EOS and TRON, Terra prioritizes performance, scalability and interoperability at the expense of decentralization.
LUNA Crypto
Although Terra is still managed by Terraform Labs, LUNA token holders can participate in policy making through staking. Terra validators can submit protocol update proposals and use LUNA as a voting power.
While other Layer 1 protocols are targeting crypto-savvy markets, Terra is targeting non-crypto-capable markets as a growth strategy.
By relying on the UST stablecoin, savings protocols such as Anchor and the synthetic stock trading platform Mirror, Terra is well positioned to drive real-world adoption.
Additionally, Terra will experience the Columbus 5 update which will add a deflation mechanism, much like the EIP-1559 update on Ethereum.
Additionally, Terra will experience the Columbus 5 update which will add a deflation mechanism, much like the EIP-1559 update on Ethereum.
