Crypto Academy

Terra Luna

Terra Luna

3 min reading

Find out more about Terra Luna and its features in this article.

What`s Luna

Terra Luna


For daily use, cryptocurrency transactions are still quite problematic and complicated, in particular because of the high volatility and insufficiently elaborated system of interaction with reality.  Terra specialists decided to change this situation and create an alternative to such outdated payment giants as PayPal. Learn more about Terra Luna in this article.

What is Terra (LUNA)?

Terra is a conceived project to create stablecoins that are pegged to fiat currencies, bringing together the virtues of exchange rate stability with bitcoin’s resilience to censorship and fast, budget-friendly settlements. As we know, cryptocurrency assets experience serious fluctuations in exchange rates, helping to attract new investors, but also preventing their proliferation as a payment method and other transactions. Most potential users simply become uninterested in participating in receiving payments in a currency whose exchange rate changes by 10-20% per day. Terra solves this difficult problem by relying on a flexible monetary policy and issuing tokens with a stable exchange rate, but they are tied to various fiat currencies. Despite the necessity of using fiat or more secured cryptocurrency as stock, every Terra stackcoin is converted into a LUNA network token. LUNA is Terra’s own token network, using it in stabling, managing and providing a stability of the stablecoin exchange rate. For this reason, LUNA plays a key role in Terra’s network and ecosystem. 

The history of Terra Luna

Project Terra was founded by Daniel Shin and Do Kwon in January 2018. They envisioned the project as a means to promote the rapid diffusion of blockchain and cryptocurrency technology with a focus on price stability and utility. Kwon became CEO of Terraform Labs, in charge of Terra. Before starting Terra, Shin co-founded and managed Ticket Monster, a so-called TMON, South Korea’s leading e-commerce platform. He later founded Fast Track Asia, an innovation center that collaborates with entrepreneurs to build full-service companies. Previously, Kwon was the founder and CEO of Anyfi, a decentralized wireless networking company. He was also a software specialist at Microsoft and Apple.

Features of Terra Luna

Terra is trying to differentiate itself through the use of stablecoins tied to fiat currency, pointing out that they bring together cryptocurrencies with the borderless advantages and ordinary price stability of fiat currencies. Blockchain technology supports the principle of one-to-one pegging with an algorithm that makes the demand for stablecoins change with the demand for them. If necessary to increase or decrease the amount of stablecoins as required by the market, LUNA owners can exchange them at a favorable exchange rate for Stablecoins. Terra has entered into a number of partnership agreements with certain payment platforms, especially in the Asia-Pacific region. For example, in July 2019, Terra partnered with South Korean mobile payment app Chai, whereby purchases made with the app on e-commerce platforms go through Terra’s blockchain network. The fee for each transaction is (on average) 2-3% for the merchant. Terra is also supported by the Terra Alliance, a group of businesses and platforms advocating for Terra adoption. The company declared in February 2019 that the alliance includes e-commerce platforms from 10 different countries with an audience of 45 million users and a gross merchandise value of $25 billion.

However, many experts call stablecoins the golden future of cryptocurrencies, however, as they are presented now, they can be called cryptocurrencies rather conditionally. Centralization, low scalability, and floating exchange rates are holding back the use and further spread of stablecoins. The Terra network solves these problems by creating a new version of technologies and solutions that are already out there. With LUNA, Terra offers a truly sustainable and decentralized currency grounded in fiat.