Saturday, June 25

The bullish case for Terra after the Columbus-5 update


Terra’s three-month rally (LUNA) saw its token surge 674%, catapulting LUNA into the ranks of potential so-called “Ethereum killers.” LUNA has been on a roll lately because Terra’s most recent update, Columbus-5, has effectively overhauled its tokenomics and brought significant changes to its technology.

LUNA is currently in four place in total value locked (TVL) among other blockchains, indicating its growing popularity for decentralized finance (DeFi) applications and also supporting its long-term viability.

Terra is a layer one blockchain developed by South Korean startup Terraform Labs and was launched in January 2018. It has a payments-centric ecosystem powered by algorithmic stablecoins and aims to be the infrastructure for all applications that they are building Terraform Labs and the Terra Community.

Terra already offers public services in real life, particularly among merchants. Arrington Capital, Lightspeed Venture Partners and Pantera Capital have committed around $ 150 million to fund projects based on Terra.

Terra moving parts

Terra is built using Cosmos, which uses Tendermint’s proof-of-stake delegated consensus mechanism. This makes it possible to scale up to thousands of transactions per second along with near-instant finality at much cheaper rates compared to Etheruem. Cosmos is being used by other major projects like Binance Chain, Crypto.com, and Cosmos Hub.

Currently, Terra has 139 validators, with a total of 341 million LUNA wagered, according to Terra Analytics.

An important detail about the Terra blockchain is that it uses a dual token system, involving Terra (LUNA) and TerraUSD (UST). LUNA serves as the protocol’s utility token, while UST is the native stablecoin.

LUNA’s tokenomics ensures the stability of UST and other stablecoins. UST, on the other hand, is an algorithmic stablecoin introduced in September 2020. This means that UST does not require any centralized or collateralized backing, helping you avoid reliance on central entities and other centralization issues.