Terra Classic is the decentralized platform that aims to serve as the foundational building blocks for a new digital economy with its stablecoin protocol, oracle system, and smart contracts. The Terra protocol is the leading decentralized and open-source public blockchain protocol for algorithmic stablecoins. The Terra ecosystem is a quickly expanding network of decentralized applications, creating a stable demand for Terra and increasing the price of Luna.
Using a combination of open market arbitrage incentives and decentralized Oracle voting, the Terra protocol creates stablecoins that consistently track the price of any fiat currency. Users can spend, save, trade, or exchange Terra stablecoins instantly, all on the Terra blockchain. The Luna token provides its holders with staking rewards and governance power.
Since stablecoins are only valuable to users if they maintain their price peg, the Terra protocol uses the basic market forces of supply and demand to maintain the price of Terra. When the demand for Terra is high and the supply is limited, the price of Terra increases. When the demand for Terra is low and the supply is too large, the price of Terra decreases. The protocol ensures the supply and demand of Terra are always balanced, leading to a stable price.
The price stability of Terra is achieved by the protocol’s algorithmic market module, which incentivizes the minting or burning of Terra through arbitrage opportunities. Arbitrage occurs when a user profits from price differences between markets.
When the price of Terra is high relative to its peg, supply is too small and demand is too high. The protocol incentivizes users to burn Luna and mint, Terra. The new supply of Terra makes its pool larger, balancing supply with demand. Users mint more Terra from burned Luna until Terra reaches its target price. The Luna pool gets smaller in this process, increasing the price of Luna.
When the price of Terra is too low relative to its peg, supply is too large and demand is too low. The protocol incentives users to burn Terra and mint Luna. The decrease in Terra’s supply causes scarcity, and the price of Terra increases. More Luna is minted from burned Terra until Terra reaches its target price. The Luna pool increases and lowers in price.
Thus, Luna is the variable counterpart to the stable asset Terra. By modulating supply, Luna’s price increases as the demand for stablecoins increases.
Who are the founders of Terra Classic (LUNC)?
In Seoul, South Korea, Do Kwon, and Daniel Shin, commonly known as Shin Hyun-sung, formed Terraform Labs.
What is Terra Classic (LUNC) used for?
The Terra protocol’s market module enables users to always trade 1 USD worth of Luna for 1 UST, and vice versa, incentivizing users to maintain the price of Terra. This same principle is true for all Terra stablecoin denominations.
Users can access the mint and burn function of the market module by performing market swaps in Terra Station.
Validators are the miners of the Terra blockchain. They are responsible for securing the Terra blockchain and ensuring its accuracy. Validators run programs called full nodes which allow them to verify each transaction made on the Terra network.
The Terra protocol is a decentralized public blockchain governed by community members. Governance is the democratic process that allows users and validators to make changes to the Terra protocol. Community members submit, vote, and implement proposals.
Staking is the process of bonding Luna to a validator in exchange for staking rewards. Users can stake their Luna to validators in exchange for staking rewards. Validators also play an important role in the governance of the Terra protocol.
Community members vote with their staked Luna. One staked Luna equals one vote. Validators vote with their entire stake unless specified by delegators.
Rewards and incentives
The Terra protocol incentivizes validators and delegators with staking rewards. Staking rewards come from two sources: gas and swap fees. The transaction fees from the block are distributed as staking rewards to validators and delegators. Proposers get rewarded extra for their participation.
Exchanges between Terra and Luna are subject to a spread fee. Swap fees are directed to the Oracle reward pool, where they are distributed over two years to validators who faithfully report correct Oracle prices.
Delegators stake their Luna to a validator, adding to a validator’s weight, or total stake. In return, delegators receive a portion of transaction fees as staking rewards.
How is Terra Classic (LUNC) unique?
The protocol consists of two primary tokens, Terra and Luna.
Terra is the stablecoin that tracks the price of fiat currencies. Users mint new Terra by burning Luna and stablecoins are named for their fiat counterparts. For example, the base Terra stablecoin tracks the price of the IMF’s SDR, quoted TerraSDR, or SDT. Other stablecoin denominations include TerraUSD or UST, and TerraKRW or KRT.
Luna is the Terra protocol’s native staking token that absorbs the price volatility of Terra. Luna is used for governance and mining. Users stake Luna to validators who record and verify transactions on the blockchain in exchange for rewards from transaction fees. The more Terra is used, the more Luna is worth.
Stablecoins are the main feature of the Terra protocol — they are crypto assets that track the price of an underlying currency. As a digital form of currency, Terra stablecoins can be used just like fiat currency with blockchain’s added benefits. They are an unchangeable public ledger, with instant transactions, faster settlement times, and fewer fees.
How many Terra Classic (LUNC) coins are in circulation?
It has a circulating supply of 6,590,956,029,396 LUNC coins.
How is the Terra Classic network secured?
The Terra blockchain is a proof-of-stake blockchain, powered by the Cosmos SDK and secured by a system of verification called the Tendermint consensus. Because multiple independent validators take place in consensus voting, it is infeasible for any false block to be accepted. In this way, validators protect the Terra blockchain’s integrity and ensure each transaction’s validity.
How do I buy Terra Classic (LUNC)?
The LUNC token can be used for a wide range of uses, like staking and governance.
LUNC tokens can be easily purchased by following the following steps.
Open an account with the crypto trading platform.
* Transfer the specific amount of your fiat currency to your account.
* Wait for your deposit to be confirmed and buy LUNC through your trading account by exchanging with BTC, ETH, or USDT.
Which Cryptocurrency Wallet Supports Terra Classic (LUNC)?
The PTPWallet platform supports many cryptocurrencies with Terra Classic soon to be included. Because of its vast use case, PTPWallet has grown to become one of the most used platforms, as it serves as an exchange and an engine to discover other cryptocurrencies. The platform offers a simple user interface, supported by both Android and iOS devices, and comes with its own mobile wallet app.