Since the beginning of this year, Terra’s Luna coin has grown more than 50x and still has a great future ahead, given the rising demand for stablecoins and financial services in the Defi space. The best way to think of the Terra-Luna network is as a fully digital, decentralized financial institution with its own central reserve. Its customers can earn interest on their assets, spend them through its payment system, and even invest in synthetic stocks. A rich ecosystem has already been built on top of the Terra-Luna ecosystem. So in this article, we will first introduce Terra, followed by an introduction to12 promising projects built on top of it in alphabetical order.
Terra is a smart-contract enabled blockchain adopting the Cosmos software development kit (SDK) and Tendermint Proof-of-Stake (PoS) consensus mechanism. It focuses on payment processing and stablecoins to solve the problem of the price volatility of cryptocurrencies. Unlike Tether (USDT), an off-chain collateralized stablecoin backed by non-crypto currency bank deposits, Terra’s stablecoins (e.g., UST) are algorithmic stablecoins that are not collateralized but instead backed by its native LUNA token. As a result, its unique dual coin system offers both price-steadiness and high growth earnings potential. For example, when demand for Terra UST increases UST>$1 (decreases UST < $1), LUNA token holder can swap $1 worth of LUNA (UST) for UST (LUNA), thus making a profit. However, once the supply of UST (LUNA) increases, the price returns to $1. Thus, the whole process of mining LUNA (UST) in exchange for UST (LUNA) to reduce price volatility is called seigniorage.
Terra’s Chai payment system has already millions of users and processes billions of dollars in transactions each year. It is expected to grow as the project expands to countries beyond South Korea, such as Singapore, Thailand and Taiwan. Terra’s decentralized, permissionless and read more