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What value does the Terra (LUNA) cryptocurrency have?

The Terra (LUNA) cryptocurrency has been attracting attention lately. For example, Terra’s Market Cap grew from $867.662 million on 31 January 2021 to $10.882 billion on 23 August 2021.

Thus, I estimate Terra’s Market cap grew by $10.14 billion in under eight months. Overall, CoinMarketCap gave Terra a $28.85 Coin Price, a $28.719 billion Fully Diluted Market Cap, and a $1.012 billion Market Volume on 23August 2021. They based those numbers on a Circulating Supply of 405.309 million LUNA and a Total Supply of 995.707 million LUNA.

So what is Terra, and why does Mr. Market like it? Terra is a cryptocurrency created by an organization they call Terraform Labs. Terraform Labs is gaining enormous respect with several blockchain products, including stablecoins.

TerraUSD (UST)

For example, the TerraUSD (UST) could be the first scalable decentralized stablecoin. They also claim TerraUSD is yield bearing.

Scalable means Terra’s platform could process enormous numbers of UST transactions at once. TerraUSD is scalable because it is an algorithmic stablecoin, Medium writer Do Kwon claims. Kwon alleges that the DAI (DAI) stablecoin is not scalable.

Terra claims you can use its stablecoins for instant settlements, and seamless cross border exchanges. They claim Terra has over two million active payment users and a $1 billion Tx volume per annum.

They also claim TerraUSD is an interchain stablecoin. That means it can work on multiple blockchains at once. For example, Ethereum (ETH), EOS (EOS), and Solana (SOL) at the same time.

Terra’s Protocols

Terra increases stablecoin value with the Anchor Protocol. Anchor tries to offer better yield from stablecoins with staking returns from multiple proof-of-stake blockchains. Terra claims Anchor offers no minimum deposits, frictionless access, and no signup requirements anywhere in the world.

Terra claims the Mirror Protocol allows users to create fungible assets, or synthetics, that track the price of real world assets. For example, synthetic that tracks the price of a barrel of crude oil.

You can trade Mirror Assets or mAssets  through the Mirror Wallet, Terraswap, the Mirror web app, and mETH. The mEth allows users to trade mAssets on the Ethereum. Thus you could use Ethereum (ETH) to buy Mirror Assets. Mirror can work on multiple blockchains because they built with a sidechain or interchain. A sidechain or interchain is a less-encrypted shortcut between blockchains.

Terra Smart Contracts

Terra supports smart contracts enabled by CosmWasm Technology. Terra claims the CosmWasm smart contracts can run on multiple blockchains, use Terra stablecoins for payments, make on onchain swaps, and give DApp users access to Terra’s payment services.

A smart contract is a digital robot that performs a specific task on the blockchain. For example, the smart contract in a stablecoin makes payment in a fiat currency when you spend the stablecoin. Hence, the TerraUST (UST) stablecoin makes payment in US dollars when you spend it.

What Value does Terra have?

Terra and Terraform Labs are attracting media attention and investment. In particular, both Coinbase (NASDAQ: COIN) and hedge fund billionaire Mike Novogratz invested in Terraform Labs. Novogratz’s Galaxy Digital led a $25 million investment round in Terraform in January 2021, TechCrunch claims.

 

Impressively, Pantera Capital and Arrington XRP plan to invest $150 million on Terra ecosystem products, TechCrunch claims. One reason for this investment is popularity of Terra’s Chai wallet in Asia, TechCrunch speculates.

 

To attract more investments and money, Terra has launched Terraform Capital. Terraform Capital is a venture capital project that raises money for blockchain projects. Terra hopes to promote TerraUSD by asking that Terraform Capital products use the stablecoin.

 

I think Terra (LUNA) is an interesting cryptocurrency with a confusing name. LUNA means moon and Terra means earth. I think Terra has real value because Terraform Labs can attract outside investment and offer products that could make money in the real world.

 

Importantly, Terra’s developers understand the importance of scalability, fungibility, and interchains. I think the $28.83 Coin Price, $1 billion 24-Hour Market Volume, and $11.7 billion Market Capitalization, Coinbase gave Terra on 23 August 2021 were justified. They based those numbers on a Circulating Supply of 404.9 million LUNA.

 

If you are looking for a scalable cryptocurrency that is trying to cash in on stablecoins and scalability, TerraUSD (UST) and Terra (LUNA) are worth a look.

 Originally published at https://marketmadhouse.com on August 23, 2021.