Terra (LUNA) Review 2022
Following the meteoric rise of Terra (LUNA) in 2021, the coin is viewed today as one of the most promising digital assets. The cryptocurrency has made a whopping 140X last year due to its robust use case, and the potential is still to be unleashed. What makes Terra so valuable? How does its sophisticated tokenomics work? What is the best way to buy and store LUNA? Let’s try to answer these questions.
What Is Terra (LUNA)?
Why fiat and stablecoin remittances as we know them are obsolete
Businesses in South Korea, Mongolia, and the USA operate with their local fiat currencies — before it comes to international trades. Sometimes US-based companies have to send payments in South Korean won, while Mongolian businesses need to transact the US Dollar. This is the moment where it becomes tough — cross-border fiat payments are expensive and take days to settle.
Is cryptocurrency a solution here? Bitcoin and other assets are too volatile to serve as means of payment, whereas stablecoins that are mostly pegged to the US Dollar don’t solve the problem either.
What if stablecoins pegged to national fiat currencies of Asian countries were created? This is exactly what Terra did: it issued TerraUSD (UST) pegged to USD, KRT pegged to the South Korean won, and MNT for Mongolian tugrik. The coins are easy to operate with — any business or individual can send them globally with just a 0.5–2% fee in mere seconds.
If you run a business in America and need to send money to your partner in South Korea, you can exchange UST for KRT and initiate a transaction on the Terra blockchain. There will be no third parties processing your payment, and you won’t have to pay any hidden fees. Hold as much money in stablecoins as you wish without any limits on withdrawals common for fiat currencies.
Terra Use Cases
Since Terra’s launch in 2019, the platform has received massive adoption. At least 14 South Korean banks leverage Terra, and hundreds of businesses in the country operate with KRT. The asset is also extensively used by 2 million individuals that spend over $1 billion worth yearly on TerraKRW (KRT) on clothes, books, and more. In Mongolia, over 40,000 citizens are taking advantage of MNT.
Terra’s adoption is facilitated by local dApps designed to power the stablecoin payments. Another use case of Terra is savings: by simply storing your UST on the Anchor platform, you can make a 10% APR.
What Is the LUNA Token?
Terra’s staking token, LUNA, ensures the stability of UST, KRT, and MNT. Whenever a user makes a transaction with one of these stablecoins, a fee is paid and goes to LUNA stakeholders.
The more payments like that are processed, the more fees stakeholders can collect, which increases the value of LUNA. You can participate in this process as well — stake LUNA, delegate the tokens to the validator nodes, and receive your share of the reward.
When staking LUNA, you also have a say in discussions regarding protocol updates. You can vote for shifts in monetary policy and propose tech upgrades to Terra. As a result of such community voting, new stablecoins pegged to local fiat currencies can be issued.
Terra Stablecoins And LUNA
The LUNA token serves as the backing asset for algorithmic stablecoins based on Terra. Here’s how it works: the price of 1 TerraUSD (UST) derives from its supply and demand, so when more users pay in UST, they increase the stablecoin’s value. To stabilize its price, LUNA holders dilute the UST supply by releasing new UST tokens. They have previously bought $1 worth of LUNA for $1 worth of UST, and now they can sell this UST for over $1 thus making a profit. When new TerraUSD tokens are released, their supply increases, and the price goes back down to $1. In turn, once LUNA is sold, the token becomes more scarce — and thus more valuable.
Conversely, when the UST price drops below $1, its holders can sell the stablecoin for LUNA and profit. The UST supply has shrunk, the price goes back up to $1.
What Is the Team Behind LUNA?
Daniel Shin and Do Kwon, two developers and businessmen from South Korea, founded Terra in 2018. Shin is known for creating one of Korea’s biggest online stores, while Kwon has got on the 30 under 30 list by Forbes: he managed to collect $32 million from Binance and other investors for Terra and inspired over 40 million users to leverage it within the first year since its launch. Kwon is currently the CEO of Terraform Labs — the company that backs Terra.
What’s on Terra’s Roadmap?
Although there is no straightforward roadmap for Terra, we can outline the achievements of the project according to previously set milestones.
In August 2021, Terra announced Wormhole — a cross-chain messaging protocol that allows for value exchange between Terra, Ethereum, Solana, and Binance blockchains.
In 2021, the team also enriched developers’ opportunities to leverage its blockchain with Terra Spacecamp — a Bootcamp for building high-tech Terra-based Web3 and DeFi products for mass adoption.
Finally, one of the most significant events for Terra last year was the Columbus-5 upgrade. It has facilitated the release of several protocols that made Terra even more attractive to new customers. Also, Columbus-5 directed all transaction fees to LUNA stakers (they were burned before the update).
Terra (LUNA) Price Dynamic
In 2021 and early 2022
Terra started the year 2021 at $0.65 and finished it at $91.36, demonstrating a blazing 140X growth. The expected Columbus-5 update and Wrapped LUNA listing on Coinbase Pro pushed the token to its all-time high in September, but the further promotion of the platform helped it climb to the new ATH of $103.33 in December.
Terra (LUNA) price prediction for 2022 and on
The LUNA token price is $52.50 as of mid-February 2022. Terra’s value, use cases, adoption rate, and considered tokenomics contribute to its growth, and price predictions for 2022 and beyond are mostly bullish. Wallet Investor expects LUNA to cost $157.2 in 1 year and $555 in 5 years. Longforecast shows a more moderate prediction of $88 by the end of 2022 and $91.6 by February 2023. The price of $148 is expected for LUNA in 5 years. Digital Coin Price gives LUNA $71 in 2022 and $111 in 2025.
NOTE: Do not consider this investment advice. Do your research and consider high risks while buying, selling, or exchanging cryptocurrency.
Terra (LUNA) Staking
Staking Terra (LUNA) means delegating your tokens to a validator node that adds transactions to the Terra blockchain. Although Terra is a Proof of Stake network, it has a unique staking rewards model.
Terra nodes verify transactions, and they receive a small share of every payment that they process. The more transactions they confirm, the higher their income is. By delegating your tokens to validators, you raise their chance to verify more transactions and get bigger rewards. A part of this profit goes to you according to the size of your contribution. LUNA staking goes with a 10% APY and offers occasional stablecoin airdrops.
Where Should I Store Terra (LUNA)?
Terra Station desktop or mobile app
The official wallet of Terra allows you to track your transaction history, monitor your Terra-based stablecoins, watch for airdrops, and stake LUNA. The wallet is available for desktop, Android, and iOS. To leverage the desktop version, head on to Terra Station, click “Connect” and “Download Terra Station”.
NOW Wallet is a multi-currency wallet where you can store LUNA together with 300+ other cryptocurrencies. It’s accessible from mobile devices, has a built-in crypto exchange, and lets you buy LUNA and other digital assets with your credit card.
Ledger Nano S
Ledger is a hardware wallet that boasts utmost security and is practically inaccessible to hackers as it stores your private keys offline. 1000+ coins including LUNA can be held on Ledger. To spend your funds, you’d have to connect the wallet to the PC via cable or to a mobile phone via Bluetooth.
What’s the Best Way to Buy And Trade Terra (LUNA)?
Terra (LUNA) exchanges
Binance, Huobi, and other major crypto exchanges allow you to trade LUNA in dozens of pairs. Daily trading is convenient at such platforms, but there is one shortcoming that relates to all centralized entities: they own private keys from you crypto, hence have the technical means to limit access to your coins because of unexpected maintenance or a hack.
Buy LUNA on ChangeNOW without registration
ChangeNOW is free from these drawbacks — as a non-custodial service that doesn’t have access to your private keys, we have no ability to control your crypto. You can use our platform to exchange Terra (LUNA) or TerraUSD for 300+ cryptocurrencies. No KYC, signup, or identity verification is needed, and the whole process takes you about 5 minutes. Smooth exchanges and prompt customer support have brought us 4.7/5 stars on Trustpilot.
Terra is a Proof of Stake blockchain that powers fast and cheap cross-border payments in stablecoins pegged to different fiat currencies. Among such, there are UST for the US Dollar, KRT for South Korean won, and MNT for Mongolian tugrik. The stablecoins have gained massive adoption since their launch. Terra tokenomics ensures great rewards for LUNA stakeholders, which is among the factors why it’s popular among investors. Price predictions are mostly bullish for Terra. If you agree with such price forecasts, visit ChangeNOW to buy Terra in 5 minutes without registration.