Terra Ecosystem Overview: A Guide for Newcomers

What is Terra and what makes it unique?

Terra is a decentralized blockchain platform founded in 2018 by co-founders Do Kwon and Daniel Shin from Terraform Labs, which brought several unique concepts and ideas to the crypto market. The uniqueness of the platform is in its fully-fledged ecosystem that provides a mechanism for securing the price-stability of stablecoins, blockchain oracles and smart contracts that automatically process transactions on the platform. Terra is supported by the Terra Alliance, a large group of 15 e-commerce companies from Korea and Southeast Asia.

Terra Tokenomics

The Terra ecosystem already includes 15 stablecoins, such as TerraUSD (UST), TerraKRW (KRT), TerraMNT (MNT), and others. If necessary, users can initiate the creation of new stablecoins pegged to other fiat currencies. Let’s take a closer look at the UST stablecoin which is pegged to the US dollar.

Stablecoin TerraUSD (UST)

In September 2020, together with the Bittrex Global crypto exchange, Terra introduced the stablecoin TerraUSD (UST) which developers described as an interblockchain stablecoin. The plan is to make UST available on every major blockchain platform, including Ethereum, Solana, Polkadot, Algorand, and Binance Smart Chain (BSC). The UST stablecoin is currently available on platforms such as Uniswap (V2), 1inch Exchange, Sushiswap, Terraswap, and Pancake Swap. You can transfer assets between Terra, Ethereum or Binance Smart Chain blockchains by using Terra Bridge.

LUNA

LUNA is the native staking token of the Terra protocol and foundational asset for the entire ecosystem. LUNA has two core functions which are:

  • ensuring the price stability of Terra stablecoins through its role in collateralizing the mechanisms;
  • providing incentives for the platform’s validators that ensure the security of the blockchain.

What projects are helping the development of Terra?

One of the key drivers of Terra’s growth is the use of CHAI, MemePay applications and the launch of innovative blockchain protocols such as Mirror and Anchor, which are driving the growing applicability of the TerraKRW (KRT), TerraMNT (MNT), and TerraUSD (UST) stablecoins.

  • CHAI is an e-wallet for fast and cheap mobile payments in Korea, which has become one of the main growth drivers of the Terra ecosystem. According to CHAISCAN, the wallet already has over 2.4 million users with $1.2 billion in payments per year. Users receive discounts for paying in KRT tokens. The CHAI solution was integrated by leading e-commerce companies.
  • MemePay is an electronic wallet in Mongolia that uses MNT for payments.
  • Anchor is a savings protocol for deposits in UST stablecoins offering low-volatile 20% yields, which significantly exceeds the yield from lending on other platforms. Unlike other platforms, Anchor accumulates rewards from staking thanks to the Proof-of-Stake mechanism to generate income. This eliminates the possibility of a situation where yields fall due to lower demand for ETH, as it happens in lending markets such as USDC and DAI.
  • Mirror is a synthetic asset protocol that tracks the price of real assets such as, for example, traditional stocks of Amazon (AMZN), Google (GOOGL), Tesla (TSLA), and others. Investors can invest in tokenized stocks, trade synthetic assets, and also add them to liquidity pools. Mirror introduces a new term of cryptoassets called mAssets.

How to make money with Terra: where to start

LUNA staking is the easiest way to make money for those who want to invest in tokens.

Good to know

The annual return on staking is approximately 10–11%. Terra rewards consist of a mixture of LUNA and various stablecoins. Stakers will also receive free ANC, MIR, and genesis airdrops from future protocols of which at least 15 are already known. There is no minimum or maximum staking amount, so you can stake any amount of LUNA to receive rewards.

Investing in MIR

MIR is a token that runs on the Mirror synthetic asset platform. The Mirror platform solves the problem of accessing the trading markets. Protocol users have access to tokenized assets, for example, shares which rate is tied to the value of real-world assets. They can be traded from anywhere in the world due to the absence of restrictions from regulators.

ANC token is another advanced way to make money with Terra

Anchor protocol allows UST holders to earn up to 20% yields on their assets. This is possible by lending stablecoins to other users looking to borrow UST on stakeable assets known as bAssets. So far, only one bAsset — bLUNA — is available. Using bLUNA as collateral borrowers can take out loans in stablecoins. It is worth noting that both lenders and borrowers earn. How is this possible?

Conclusion

Terra is an ambitious project for fast, secure and cheap payments, deposits and investments, giving users confidence in the stability of digital financial transactions.

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