Terra

What is Terra (MOON)?

THE MOON is native token of the Terra 2.0 platform. Terra 2.0 arose as hard fork of the original Terra protocol, which has since been renamed Terra Classic (LUNC). LUNA should not be confused with TerraClassicUSD (UST), which was a stablecoin on the Terra Classic blockchain.

THE MOON is bid And governance token for the Terra 2.0 blockchain. Its name is infamous for being associated with the 2022 cryptocurrency crash. For clarity, the new Terra blockchain is called Terra and Terra 2.0, while the old network is called Terra Classic. The current price dynamics of LUNA can be seen in the dynamic chart above.

How and why was Terra 2.0 founded?

Terra 2.0 is a blockchain fork that occurred on May 27, 2022, following the collapse of the stablecoin that was then known as TerraUSD (UST) and has since been renamed TerraClassicUSD (USTC).

The initial version of the Terra crypto ecosystem was created by Daniel Sheen And Do Kwon. Shin is a venture capitalist and business analyst. He left the Terra project in 2020 and has since founded and served as CEO of payment technology company Chai.

Kwon is a computer scientist and blockchain developer. He is the CEO of Terraform Labs, the company behind LUNA, and is actively involved in the Terra revitalization project. He was previously involved in the failed stablecoin project Basis Cash.

Development of Terra Classic began in 2018. The platform officially went live more than a year later. His The goal was to work toward widespread adoption of stablecoins that would be pegged to the value of fiat currencies.such as the US dollar and South Korean won, while keeping the blockchain secure and the cryptocurrency censorship-resistant.

Over the years, TerraUSD has become one of the most popular stablecoins on the market. The LUNA asset was developed as part of the Terra ecosystem to stabilize the TerraUSD token. The relationship between TerraUSD and LUNA was symbiotic, as the price stability of both assets was directly dependent on each other.

LUNA was supplied via burning And coinage depending on UST requirements, making it a potentially hyper-deflationary asset due to its limited maximum supply of 1 billion. The value of LUNA depended on the stability of the TerraUSD market, which was the main mechanism at work during the 2022 crash.

The Terra Classic collapse began on May 9, 2022, when the UST peg to the US dollar was broken.. As a result, collateral collapsed to its lowest level in history. LUNA price dropped to almost zero. By May 13, the Terra Classic blockchain was officially stopped.

Subsequent events led to one of the largest cryptocurrency crashes in history, affecting virtually every asset and causing several other algorithmic stablecoins to lose their peg. Bitcoin’s value halved from US$40,000 in mid-April to US$20,000 two months later, causing an even wider ripple effect throughout the market.

After the crash, Kwon announced that there was a revival plan. Thus, the Terra 2.0 network started working after the fork on May 27. However, given the distrust of the general public and Terra’s reputation following the crash, LUNA’s price dropped almost instantly, from $19.54 at launch to just $4 a few hours later.

What are the features of Terra 2.0?

LUNA is a highly volatile asset, as evidenced by the sharp drop in Terra’s value within 24 hours of the relaunch. The total supply is limited to 1 billion assets. Terra 2.0 was programmed to deflate. However, due to a glitch on the old fork, the price of LUNA may not rise steadily over time.

The Terra 2.0 asset is primarily used for two purposes – staking and management. While the previous iteration also acted as collateral for the USTC token, the new blockchain does not perform such a function.

Developers can use the Terra ecosystem to program smart contracts and create decentralized applications (dApps). The platform offers a test network, space for data analysis and additional necessary tools for on-chain development.

Like the old chain, developers can create algorithmic stablecoins on Terra. it’s the same it is possible to mint non-fungible tokens (NFTs) on Terra. NFTs can be locked in crypto wallets or listed on marketplaces for the price of LUNA.

Terra uses Proof-of-Stake (PoS) consensus algorithm to ensure network security. Liquidity providers are incentivized to continue contributing to the network by receiving rewards. Betting incentives are calculated based on whether the user owned LUNA before the glitch or not.

Terra is also used as a network governance token. This feature was carried over from Terra Classic as the decision to revive LUNA and launch a new blockchain was made through a leadership vote. The Terra ecosystem itself is community-owned and decentralized.

What is the difference between Terra (LUNA) and Terra Classic (LUNC)?

The Terra Classic network retained control of the USTC token. However, on May 9, 2022, its value was officially untied from the US dollar. The snowball effect of the cryptocurrency collapse led to the blockchain eventually splintering in an attempt to revive it.

There may be some confusion regarding asset names due to Terra’s history. The old blockchain initially hosted LUNA and UST tokens. However, after the fork, the old blockchain was renamed Terra Classic and the asset tickers were changed to LUNC (Luna Classic) and USTC (TerraClassicUSD), and the new Terra 2.0 blockchain now hosts LUNA.

Despite the initial target, at launch the new Terra price didn’t come close to Terra Classic’s peak of $119, which was recorded in April 2022, a few weeks before the crash.

The main difference between the Terra Classic and Terra crypto platforms is their approach to stablecoins. After the fall of Classic, it was decided that the new network would not host stablecoins. the new LUNA token is not used as collateral.

LUNC is considered an extremely volatile asset, and although LUNA’s price has not fallen as much since its relaunch, there are concerns about its future.