What is Terra LUNA coin?

What is Terra LUNA coin?

What is Terra LUNA coin?

The Terra LUNA coin is making headlines in the crypto space for its historic collapse. But what is Terra LUNA coin?

In today’s fast-evolving digital economy, especially thanks to the COVID-19 pandemic that allowed digital systems to evolve faster, digital payment systems have become essential to today’s global economy. However, there are still many hurdles, especially in Asia’s digital payments industry, which is currently extremely crowded with services available such as Kakao Pay, Ali Pay, Samsung Pay, and many others in use.

In order to overcome this challenge, Terra built a next-generation blockchain payment network to allow the growing Asian e-commerce sector to seek efficient payment networks that are also helping to increase customers. It was founded in January 2018 to drive the rapid adoption of blockchain technology through stability and usability.

Prior to its collapse, Terra hoped to overcome the challenge. Now its future is in doubt.

What is Terra’s stablecoin?

Stablecoins are the digital version of the global fiat currencies. They are often backed by commodities such as gold or silver that help to overcome the global inflation rate. Stablecoins, due to their backing with existing assets, help reduce the volatility that is common to digital coins.

In order to provide digital coin products, Terra has rolled out several stablecoins that include TerraUSD, TerraCNY, TerraJPY, TerraGBP, TerraKRW, TerraEUR, and the International Monetary Fund known as TerraSDR that helps to provide stablecoin services in different parts of the global marketplace. The seamless cross-border value exchange, low fees, and instant money transfer helped Terra’s stablecoins penetrate the market and become popular worldwide.

What is the LUNA Coin?

Apart from Terra’s UST stablecoin that was built to avoid volatility, Terra also offers a crypto coin present on its native LUNA currency as a utility and a governance coin. The idea was to have different collateralizing mechanisms to help back and secure the price. LUNA is also a part of the Terra network’s validator that uses Proof-of-stake (PoS) staking to ensure validity.

The help of a specialized suite for open application programming interfaces (APIs) allows merchants to set up a PoS payment integration, thus allowing for instantaneous purchases and settlement. LUNA is also designed to operate as a web-based wallet and mobile wallet, thus enabling merchants to transfer money.

The future of Terra LUNA

Prior to its collapse, Terra was working hard to become the leading e-commerce stablecoin along with DeFi service providers around the globe. Having a unique value proposition helped to accelerate blockchain technology in South Korea and the broader Asian markets.

Apart from this, Terra is further making sure that all of its transactions, extremely low fees, and instant settlements of product purchases help incentivize merchants and consumers based on a global scale.

In May 2022, TerraUSD fell to a low of 15 cents. Although it was pegged to the US dollar based on a complex algorithmic relationship with its sister currency LUNA, both coins came under pressure and collapsed. As a result of the de-pegging of UST, LUNA fell below a penny. LUNA had reached an all-time high of $119 as recently as April 5, 2022. A month later, the coin was virtually worthless.

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