Terra is a blockchain protocol based on the Cosmos framework. It is a separate chain on which Terra develops a stablecoin network and issues anchor coins for a variety of fiat currencies. Terra's stablecoins are algorithmic stablecoins with no BTC, ETH, or DOLLAR-like backing assets, backed by Terra's system token LUNA.

Create a decentralized staboin system that spans both the fiat and crypto worlds and facilitate the mass adoption of cryptocurrencies in the true sense of the word.

Most cryptocurrencies, including Bitcoin, have a pre-determined launch schedule that, combined with strong speculative demand, leads to wild price swings. The extreme volatility of bitcoin's price is a major barrier to its use as a medium of exchange or store of value. Intuitively, no one wants to pay in a currency that is likely to double in value in a matter of days, or demand payment in a currency that is likely to fall sharply in value before the transaction is over. The problem worsens when transactions take more time, such as deferred payments, such as mortgages or employment contracts, because volatility can severely damage one of the contracts, making it prohibitively expensive to use existing digital currencies in these Settings.

Flexible money supply policies maintain price stability, and fiscal spending incentivizes large communities to join the network.

At the heart of the Terra agreement to address these issues is the use of flexible cryptocurrency supply policies to maintain price stability, retain the ability to resist censorship and enable it to be used in daily transactions. The Terra agreement provides strong incentives for users to join the network with effective financial outlay to encourage community users to join the network under a system managed by the Ministry of Finance in which multiple stimulus programs compete for financing. Suggestions from community participants are reviewed by other parts of the ecosystem and, when approved, funded with the goal of increasing adoption and scaling up potential use cases.

Terra is a stablesoin blockchain protocol, and Luna, its native token, is primarily used to maintain stablesoin anchoring through pledge and destruction mechanisms.

Terra Blockchain is secured using tendermint-based proof-of-stake consensus algorithms, in which LUNA token holders use their tokens as collateral to verify transactions and receive rewards proportional to the amount LUNA holds. Token holders can also entrust someone else to verify transactions on their behalf and share in any revenue generated. Terra also provides additional guidance for validation nodes on best practices to help keep the network secure.

Terra has 1 billion tokens. Any more than that, LUNA burns until it returns to balanced supply levels. In order to maintain the price of Terra staboin, new LUNA tokens will be minted through the protocol's algorithm as needed. LUNA was initially sold in private token sales to initial investors, including the investment arms of major exchanges like Binance, OKEx and Huobi. The deal closed in August 2018, and Terra raised $32 million as a result. Of the 385,245,974 LUNA sold, 10% is reserved for Terraform LABS, 20% for employees and project contributors, 20% for Terra Alliance, 20% for price stability reserves, 26% for project backers, and 4% for Trands Liquidity.

Terra Protocol maintains a balance between promoting stability and adoption as a meaningful complement to fiat currency as a means of payment and store of value.

Different from MakerDAO's stabocoin system with the mode of "collateralized bond warehouse" that uses on-chain assets to issue collateralized assets, the collateralized bond warehouse in MakerDAO has a corresponding relationship with the users who generate the debt. When the mortgage rate is too low, the users will face liquidation. In Terra, token supply and demand adjustment is implemented through a specific algorithm within the system and Luna token, and users do not have the risk of liquidation.

Terra has a wide range of application scenarios by combining the borderless advantages of cryptocurrencies with the day-to-day price stability of fiat currencies through the use of staboins linked to fiat currencies.

Most of the financial transactions involving Terra-related cryptocurrencies originated in South Korea, where the founders are based. While Terra is gaining popularity in South Korea due to growing interest in its partner Chai, it is too early to say whether terra-related currencies will gain traction in other countries.

Terra's blockchain runs on a "limited number of nodes," he says, referring to the computers that help keep the system running. That helps reduce delays that might otherwise slow down the processing of financial transactions, he said. Market view: Terra is less "decentralized" than other blockchain platforms such as Ethereum, with Ethereum powered by thousands of interconnected computing nodes around the world. This may make Terra less attractive to some blockchain "purists."

Terra has a number of partnerships with payment platforms, particularly in the Asia Pacific region. In July 2019, Terra announced a partnership with Chai, a Korean mobile payment app, in which purchases made using the app on e-commerce platforms are processed through Terra's blockchain network. Merchants are charged (on average) 2-3% per transaction.

Since 2021, with the continuous development of Stablecoin UST on the chain (Mirror Finance, Anchor Protocol, Expansion to Solana, Harmony and other blockchain networks) and off-chain (Amazon gift cards, Travala.com payment integration), combined with the expected multi-chain assets from the Launch of the Columbus-5 upgrade in September and the Wormhole cross-chain Bridge, Terra ecology receives a lot of attention in the market.