Terra Luna Coin Understanding And Terra Luna Ecosystem Coins!

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•What is Terra?

Terra is a decentralized financial payments network that rebuilds the traditional payment stack on the blockchain.

.terra Luna uses many fiat-pegged stablecoins, algorithmically stabilized by its reserve currency called Luna, to facilitate programmable payments and the development of an open financial infrastructure. .As of December 2020, the Luna network has made transactions of approximately $299 billion for more than 2 million users.

•What is Luna?

Luna is the reserve currency owned by the Terra platform. has three core functions:

 • mining Terra transactions via staking,

.• ensure the price stability of the Terra . stablecoin

•provide incentives for blockchain platform validators.

The Terra protocol itself runs on a Proof of Stake (PoS) blockchain, where miners have to stake their Luna to mine transactions. .all else being equal, validators who have staked more Luna have a higher chance of earning the next Terra block compared to other validators who have staked less. In essence, Luna represents the mining power of validators.

.however, in order to provide security and network validation, Luna holders and stakeholders are exposed to price risk associated with these assets. This is because the Terra protocol is ready to exchange the Terra stablecoin with Luna at a specified exchange rate to maintain the stake. .when demand is high and the price is above the peg, it will sell the stablecoin for Luna. When demand is low and prices are below the peg, the opposite happens. In this way, the validator absorbs the short-term volatility of the network.

.Tco compensate, validators are awarded prizes in the form of: i) staking rewards, ii) gas fees, iii) taxes, and iv) seigniorage prizes. .bet reward is determined by the validator bet size and structured to encourage increased transaction volume. .gas fees and taxes are similar in that a small fee is charged on all Terra transactions, distributed to validators on a pro-rated basis. Finally, the seigniorage reward is awarded to validators who participate in the Luna exchange rate oracle process.

.these rewards seek to create stable and evergreen mining demand in all economic conditions. .if rewards increase, the protocol lowers network costs and seigniorage rewards, and vice versa. .more information about Luna and her bonuses can be found on Terra's Documents website, as well as in her whitepaper.

•Where and how to get Luna?

.luna can be purchased from cryptocurrency exchanges such as KuCoin or Huobi. .You can browse various centralized and decentralized cryptocurrency exchanges via the links provided. .alternatively, this page's markets tab also has a list of all exchanges currently trading the Luna pair.

How does the Terra stablecoin maintain its price stability?

.The Terra network achieves price stability by algorithmically adjusting its supply based on fluctuations in demand. .once it detects that Terra's stablecoin has deviated from its peg, it will apply pressure to correct the deviation.

.The protocol leverages natural market forces to achieve this. .for example, if the price of 1 TerraUSD (UST) is above the benchmark $1 US dollar, the protocol must compensate by increasing the supply of UST. .it mints several stablecoins and sells them on the open market. The arbitrageur can then trade $1 US Dollars Luna in exchange for 1 TerraUSD and make a profit. Printing and swapping occurs until the supply of new UST is sufficient to return the UST pegs.

.Likewise, if the price of 1 TerraUSD falls below the $1 US dollar target, the protocol will reduce the supply of stablecoins. It prints Luna and sells it on the open market. .the profit seeker can then exchange 1 UST for Luna for $1 US dollars and pocket the difference. In both cases, the Terra protocol mints as many stablecoins or Luna as needed until the stake for each asset is met.

.thus, the protocol serves as a market maker for Terra/Luna swaps. .as long as there is a certain level of demand in the Terra ecosystem, whether driven by the value of Luna or Terra transactions, the exchange of value between the two assets maintains stability and reduces volatility. .to learn.more about Terra's pricing and the role Luna plays in this mechanism, you can check out Terra's stability mechanics page or its whitepaper.

.terra seeks to achieve its vision through two branches: stability and mass adoption. For the latter, the platform has united a group of companies into a consortium known as the Terra Alliance, whose goal is to promote the use of the Terra payment network in the marketplaceeCommerce.The alliance offers some famous players like TMON, Qoo10, Carousell and Pomelo. as of 2019, the Alliance had approximately $25 billion gross merchandise value (GMV) and 45 million users.