Terra is a blockchain protocol that powers a platform of algorithmic decentralized stablecoins that underpin a growing DeFi ecosystem. It operates as a Proof-of-Stake blockchain and is built on Cosmos with the Tendermint consensus engine.
Terra’s native token LUNA acts as a governance and staking token that underpins the issuance of Terra's stablecoins and payment processing system. Stablecoins on the Terra network include TerraUSD (UST) which tracks the US dollar 1:1 and TerraKRW (KRT) which tracks the South Korean won 1:1. Terra's stability mechanism for UST and KRT depends on arbitrage activities by users with the LUNA token.
For example, when the price of TerraUSD (UST) falls to $0.95 against the USD in secondary markets, users can purchase 100 UST for $95 USD on exchanges, then use the 100 UST to purchase 100 USD worth of LUNA tokens on the Terra platform.
Terra powers the major South Korean e-commerce payments app Chai. Chai offers the same seamless payments experience as mainstream payment apps but in the background, the Terra network lowers transaction fees and allows instant settlement with merchants.
The South Korean company Terraform Labs drives the development of the Terra platform. Terraform Labs was founded by Daniel Shin and Do Kwon in 2018.
Anchor Protocol is a UST savings account that offers a stable annual yield of nearly 20% powered by staking returns from multiple Proof of Stake blockchains.
Mirror Protocol is a DeFi platform that enables users to issue and exchange synthetic assets, which are crypto tokens that track the price of real-world assets, such as stocks. Synthetic tokens provide investors with exposure to the price of the real-world assets they represent, without requiring investors to actually own those underlying assets.
There are limited US-based exchanges that sell LUNA directly. Here is the process that I have followed to purchase LUNA:
Terra is built on Cosmos and uses a Tendermint-based Proof-of-Stake (PoS) consensus mechanism. This means that users holding LUNA tokens earn staking rewards in exchange for using their holdings to support the operations and security of the Terra network. Through this process of staking, the Terra network ties its security to the honesty of the majority who are incentivized as token holders to maintain the integrity and value of the network.
LUNA token holders can earn a staking yield on their tokens through a process called delegation. Delegation is where you appoint your staking rights to a validator so that you can participate in staking without having to maintain your own node.
To stake LUNA you must first acquire LUNA as I explained in the earlier section How to buy LUNA?
To stake your LUNA you need to create a Terra Station Wallet and hold your LUNA there. Then on the Terra Station Wallet, you can navigate to the Stake tab, chose a validator, and then delegate your LUNA to be staked with that validator.
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