Newbie Quest: Understanding Terra (LUNA)

Newbie Quest: Understanding Terra (LUNA)

By Steven_BA | Crypto-Newbie | 11 Feb 2021


Another post from the Top 100 crypto-currencies is live today. I will be focusing in the following lines on Terra (LUNA).

Before going any further, the Elrond project is going well, even if the price fell from almost $204 to $180 in just two days. Thousands of people who bought EGLD when the price was below $100 now sold their amounts. It is just a matter of time until the price will go up again and even further. Maiar is already embraced by tens of thousands of people and with new innovations that will come, the Elrond project will become a force in the crypto-world.

Back to my post, right now LUNA is on the 29th position in the Market Rank. Its price is $6,02. The Market Cap is worth $2.872.323.813, with a Trading Volume registered in the last 24 hours of $394.616.487. What's worth to mention is that the Trading Volume is with 61,50% less than the last previous 24 hours. This means, that the price will go lower and with high probability of getting up again in the coming days. 

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The Circulating Supply is 475.346.051 LUNA, out of a Total Supply of almost 1 billion coins. Looking at it like a simple calculation, there are other projects too with a Total or Max Supply of almost 1 billion coins. Polkadot is one such example, so we can conclude that there would be no surprise if Terra goes up to $15-$20, if the project and the team behind it do their job well. But nothing can guarantee the success, because it is a different project than Polkadot. 

What is LUNA?

LUNA is a blockchain protocol and I will try to explain it as simple as I can. It is a technical solution which is based on the idea of using stablecoins to stabilize the global price of the international payment systems. The development of this project started in 2018, but the project itself was launched in April, 2019. 

Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems. According to its white paper, Terra combines the price stability and wide adoption of fiat currencies with the censorship-resistance of Bitcoin (BTC) and offers fast and affordable settlements.

Terra's native token, LUNA, is used to stabilize the price of the protocol's stablecoins. LUNA holders are also able to submit and vote on governance proposals.

Starting with September 2020, 

it offers stablecoins pegged to the U.S. dollar, South Korean won, Mongolian tugrik and the International Monetary Fund's Special Drawing Rights basket of currencies — and it intends to roll out additional options.

So this are the currencies that LUNA make parity with the US dollar in order to stabilize the global financial system. 

What is unique about Terra and how this is different than other crypto-currencies?

Terra seeks to set itself apart through its use of fiat-pegged stablecoins, stating that it combines the borderless benefits of cryptocurrencies with the day-to-day price stability of fiat currencies. It keeps its one-to-one peg through an algorithm that automatically adjusts stablecoin supply based on its demand. It does so by incentivizing LUNA holders to swap LUNA and stablecoins at profitable exchange rates, as needed, to either expand or contract the stablecoin supply to match demand.

Terra has established a number of partnerships with payments platforms, particularly in the Asia-Pacific region. In July 2019, Terra announced a partnership with Chai, a South Korea-based mobile payments application, in which purchases made using the application on e-commerce platforms are processed via the Terra blockchain network. Each transaction is subject to (on average) a 2%–3% fee charged to the merchant.

In addition, Terra is supported by the Terra Alliance, a group of businesses and platforms advocating for the adoption of Terra. In February 2019, the company announced that e-commerce platforms from 10 different countries, representing a user base of 45 million and a gross merchandise value of $25 billion, were members of the alliance.

Regarding historical data for the LUNA project, the All Time High was recorded almost two days ago, on the 9th of February 2021 when the price was $7,36, while the All Time Low was on the 13th of March 2020, with a recorded price of $0,011. The Terra ROI, which is the approximate return on investment if purchased at the time of launch (or earliest known price), is 254,62%, which is a very good increase. As I was saying, personally I believe that this is a good project with a big potential. My opinion is also consolidated by its position on the Market Rank. 

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LUNA is traded on Binance, Huobi Global, BKEX, KuCoin and many others. It is found on 32 exchanges, but the biggest Trading Volume is registered on Binance, with a total value of $128.851.965 in the last 24 hours.

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With such a big volume, if we are to move the market, we have to invest large amounts of money. If we are to invest just $50.000 or $100.000, there are small changes that we can increase or decrease the price. If we are looking at Reef, which has a much smaller Trading Volume daily, if we are to invest $50.000 or $100.000, we can definitely move the market, up or down, according to our transactions. The higher the volume of a project, the lower the chances of affecting it with our transactions. 

All of these being said, this is the project, this is how it works and I will follow it closely to see what happens in the future.

Thank you!

 

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Steven_BA
Steven_BA

BA and MSc in International Relations. New to cryptocurrency. One of the best political analysis. Expert in terrorism, post-conflict states and state-building. Up-to-date to everyday political and foreign news.


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