What is Terra and How does it work

What is Terra

Terra is an innovative blockchain that enables stable programmable payment systems in both field and blockchain economies. The protocol is backed by its own cryptocurrency Luna which algorithmically expands and contracts terra’s stable coins supply in order to stimulate arbitrage and keep them back to fiat currency.

How does Terra work

Terra lays the foundation for a new digital economy with its stable coin protocol oracle system smart contracts and a plan for mass use. Terra is powered by Ethereum and Selena blockchains and new blockchains are coming soon which is supported by a bucket of stable coins back to fiat currencies commonly used in e-commerce.

Unlike centralized stable coins backed one-to-one by USD like USDC and GUSD, terra stable coins are algorithmically stabilized and backed by Luna’s own crypto asset which benefits from staking rewards to amplify network effects. Terra maintains price stability for its terra SDRS by algorithmically adjusting their supply in response to fluctuations in demand beyond terrace stable coin innovation. The team behind it understands that for its protocol and stable coins to have a global economic impact it needs to maximize its adoption and networking pack. Terra has a clear plan to bring its stable coins through global payment channels to both merchants and consumers.

What makes Terra unique

Terra based payments replace the complex payment value chain of banks, credit card networks and payment getaways with a single blockchain layer. Terra stable coin payments offer instant settlements, low fees and seamless cross-border exchange and their mass adoption is supported by a multitude of partners and a growing ecosystem of products leveraging the Terra blockchain infrastructure.

Terra is leveraging its network effects and furthering its adoption with senior race style stable coins and staking rewards for Luna token holders. Merchants integrating Terra for payments receive payments in six seconds and pay zero point six percent commission in comparison to merchants accepting credit cards that have a seven day billing period and paid 2.8 percent plus credit card fees.

Terra made 330 million dollars in payments on November 20 generating approximately 3.3 million dollars in revenue for the company in comparison this made terra the third most profitable blockchain after BDC and EDH.

The Luna token acts as dividend paying capital because the token holders who hold their Luna receive hundred percent of the transaction fees generated by the stable coins payments. This feature helps enhance Terra’s network effects and increases the distribution of stable coins.

All in all Terra is creating something revolutionary here by offering competitive programmable payments logistics and infrastructure combined with a profitable business model and “Tokenomics”.


1 billion tokens being the current supply, LUNA has a maximum limit for making the equilibrium supply level stable so that the market is not flooded with oversupply of the currency circulation.


Terra was created by terraform labs and founded by Danielle Shannon call in January 2018. Sheen and Juan shared their vision of facilitating the mass adoption of cryptocurrencies by creating digital assets with an emphasis on price stability and usability.

They presented a huge payment network by adopting user engagement and powerful products and use cases based on blockchain infrastructure to help realize this vision.

They launched their cryptocurrency and blockchain payment network backed by the Terra alliance which consists of 15 large e-commerce companies in Asia which collectively produces 25 billion dollars in annual transaction volume from 45 million users. In addition to co-founder of Tara Daniel sheen is the founder and CEO of the corporation one of the largest e-commerce platforms in Asia with over 2 million users making payments using Terra.

As for Terra’s other founder Dr. Juan before Terra he was the founder and CEO of any fi-inc, a peer-to-peer telecommunications company that builds p2p connectivity solutions using mass technology to make telecommunications more scalable affordable and secure.

All in all terra has powerful founders with a clear and concise version of how to facilitate mass adoption of cryptocurrencies and blockchain technology with data.

The native cryptocurrency of the Terra protocol is Luna.  All functions are performed by blocking value in the Terra ecosystem and this is accomplished by hosting a Luna, in doing so Luna reserves as a fundamental asset for the entire terra network and ecosystem.

The Luna serves as a complementary asset designed to protect the integrity of terror mechanisms thereby ensuring network security large and specialized lunar token holders can stake their tokens to become a validator for the terror network while smaller lunar token holders can delegate their share to validators.

By doing this Luna members run the risk of maintaining along-term position in a volatile asset. Rewards provide incentives to maintain a long-term interest in storing and hosting Lunas to protect the network. Staking rewards are first allocated to validators who take a commission to maintain their validator and ensure its operations and then delegates receives taking rewards that they can withdraw individually.

Their reward that the delegate receives from this token is proportional to the size of his stake and is structured in such a way that the reward increases as the transaction volume increases. Thus owning a Luna is an investment in Terra’s long-term growth and success.

Terra USD is the most popular stable coin from terra followed by the Korean Quan

Tara Krw. Like all terra stable coins, terra USD is a decentralized stable coin that is scalable revenue generating and entertain compatible tera USD features. Security Terra USD is an algorithmic stable coin with an insurance value equal to the face value of the issued stable coin. Infinitely scalable terra stable coin monetary policy is infinitely scalable and helps defy applications and protocols reach their full potential without constraints.

In addition Terra USD and all terra’s stable coins have shared liquidity which means that UST can be exchanged for KRT on chain with negligible transaction fees profitability. Terra USD and other terrorist stable coins can generate stable returns with ancor, a saving protocol that provides reliable annual interest rates based on block rewards from leading proof of stake blockchains compatibility. 


Terra USD and other Terra’s stable coins run on both Ethereum and Selena blockchains with support for more blockchains coming soon.

However the best terra’s dr storage wallet are non-storage web 3 wallets that provide seamless access to the best apps like Uniswap harvest finance balancer and more. 

The potential uses of tera are enormous. The system is now being used as an intermediary in online payments allowing people to make online purchases freely. The project aims to become an advanced blockchain platform opening up all the possibilities of decentralization for ordinary users, merchants and developers.

Want to know how other cryptocurrencies work? Head to Zeen blog.

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