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What is Terra?

What is Terra?

Terra is one of the most well-known blockchain platforms dedicated to the creation of stablecoins. Assets are pegged to the corresponding fiat currencies and are backed by Terra's native cryptocurrency.

Full name of the company: Terraform Labs

Foundation date: 2018

Founder: Daniel Shin and Do Kwon (South Korea)

Capitalization: more than 33.9 billion dollars

Legal status: registration in Singapore


Company products

Terra blockchain is a decentralized platform designed as a full-fledged ecosystem with smart contracts, blockchain oracles, and a mechanism for securing coins. The main idea of the project is to create an efficient payment system based on decentralized technologies to provide fast and cheap transactions.

Terra operating features:

  • all work is based on smart contracts, similar to the Ethereum network;
  • high throughput - processing more than 10 thousand transactions per second (for example, Ethereum can process 20 transactions per second);
  • PoS; consensus
  • coin extraction occurs by staking;
  • fast and cheap transactions with a fee of $0.2-0.3.

In the blockchain, the roles of participants are divided into two categories:

  • validators are responsible for confirming transactions and ensuring the integrity and security of the network. First, its own node (network node) is launched, then the LUNA coin staking occurs, and upon a successful transaction, the validator receives a reward;
  • delegates send LUNA coins to validators and pay transaction fees (5-10%).

More than 70 decentralized applications are available in the Terra ecosystem, including wallets, decentralized exchanges, credit platforms, and lending protocols.

Terra developers created three protocols:

  1. Anchor Protocol – within this platform, you can create deposits in UST cryptocurrency and receive income in ANC tokens. It offers a UST lending function secured by LUNA;
  2. Mirror Protocol – it is a trading platform where you can borrow digital assets, which price is pegged to fiat currencies, stocks or gold, make farming of MIR token, add tokenized assets to liquidity pools;
  3. Pylon – it is a protocol for storing deposits offering capital protection from risks by using low-volatility tools.

There are 15 stablecoins in the ecosystem; the main ones are UST (TerraUSD), KRT (TerraKRW), and MNT (TerraMNT).

TerraUSD stablecoin is supported by the Bittrex Global cryptocurrency exchange and represents the idea of inter-blockchain stablecoin. The creators' vision is to make the coin as accessible as possible in every network.

Today, UST can be used on Uniswap, Pancake Swap, Sushiswap, 1inch Exchange, and Terraswap platforms.

The LUNA token is an internal coin of the Terra ecosystem, designed to perform two key functions:

  • algorithmic support for stablecoin exchange rates, which are released on the Terra platform;
  • motivation for the validators who are responsible for blockchain security.

The token can be involved in staking and mining of stablecoins through the burning procedure (the current rate of the cryptocurrency is analyzed).

Extra features for LUNA owners:

  • fee payment when making transactions;
  • participating in arbitrage - if the value of UST deviates from $1, a trader can buy or sell LUNA coins to maintain the supply and demand balance;
  • management activities - gaining a voice in making proposals to improve the network's operation.

ANC token – Anchor protocol coin, which allows all UST owners to earn up to 20% annual income.

MIR token – Mirror protocol coin, providing access to tokenized shares of Amazon, Tesla, Ali Baba, Apple, as well as BTC and ETH tokenized coins. MIR holders can access staking and rewards, vote, and participate in discussions regarding solutions that improve the platform's performance.

CHAI is a payment solution that operates in the Terra ecosystem so as to provide fast and low-cost mobile payments in South Korea. Today, there are 2.4 million wallet users, and the total payment volume is $1.2 billion per year.

MemePay is an e-wallet in the Terra system, which is available to residents of Mongolia, where all payments are made using MNT coin.

Terra cross-chain refers to Inter Blockchain Communication technology, developed on the basis of Tendermint consensus. It connects different networks and supports the fast exchange of transactions and data.

It is possible to transfer cryptocurrency from Terra blockchain to Harmony, Ethereum, and BSC blockchains with no centralized intermediaries involved.

Terra Station cryptocurrency wallet is a non-custodial Terra cryptocurrency web wallet providing access to voting, stacking, and atomic swap options.

Wallet functionality allows you to manage assets (LUNA, UST) and available cryptocurrencies, perform staking and receive rewards, see the full history of transactions, switching to Mirror, Anchor, and Terraswap protocols.


History

2018 – Daniel Shin, an entrepreneur, and Do Kwon, a programmer, founded their own company, Terraform Labs, dedicated to the development of the Terra platform.

The project team created the LUNA token and raised $32 million. These funds came from such investors as Coinbase Ventures, Polychain Capital, and Pantera Capital.

2019 – creating and publishing the White Paper for the decentralized Terra network and its further launch.

Basic blockchain tools, namely, Terra Finder and Terra Station cryptocurrency wallet, were implemented.

2020 – TerraUSD stablecoin issue.

2021 – the company raised $150 million in investment from such investors as Pantera Capital, Galaxy Digital, Arrington XRP Capital, and Coinbase Ventures to create its own Ecosystem Fund to develop new crypto projects created on the Terra blockchain.

2022 – DAO Terra has entered into a sponsorship agreement with the American baseball club Washington Nationals. The deal is valid for five years and is estimated at $40 million. Under the agreement, the Terra brand would appear at the club's home arena in the form of digital scoreboards, billboards near the field, and bleachers.

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