Convert LUNA to CNY

Terra is a blockchain platform designed to support stablecoin-powered payments and a vibrant ecosystem of decentralised applications.

Key takeaways

• Terra is a blockchain platform built using the Cosmos SDK and secured by a Proof-of-Stake (PoS) consensus mechanism called Tendermint BFT.
• Its primary innovation was the creation of algorithmic stablecoins, like the former UST, which were designed to maintain their peg through a mint-and-burn mechanism with its native token, LUNA.
• The LUNA token serves as the protocol's governance and staking asset, with its supply dynamics being a critical factor in the ecosystem's economic model.
• Following a major collapse in 2022, the Terra blockchain was reborn, with the community voting to create a new chain (Terra 2.0) while the original chain was renamed Terra Classic (LUNC).
• The current Terra (LUNA) ecosystem is focused on rebuilding with a renewed emphasis on developer tools and sustainable DeFi applications.

What is Terra? Key Specifications & Tokenomics

Terra is a Layer 1 blockchain that was originally famed for its suite of algorithmic stablecoins, which aimed to combine the price stability of fiat currencies with the decentralised nature of cryptocurrency.

Who created Terra (LUNA)?

Terra was co-founded by Do Kwon and Daniel Shin in 2018 through their company, Terraform Labs. Do Kwon, a South Korean entrepreneur, was the public face and core developer of the project, driving its vision for a decentralised, algorithmic stablecoin economy. Daniel Shin, also from South Korea, brought expertise in e-commerce and payments, focusing on the business integration side. The project raised significant capital from major venture firms, including Galaxy Digital and Coinbase Ventures. Following the catastrophic depegging event of its UST stablecoin in May 2022, Do Kwon faced legal challenges in multiple countries. The Terra community subsequently voted to launch a new blockchain, abandoning the failed algorithmic stablecoin model, with the original chain continuing as Terra Classic (LUNC).

How does Terra (LUNA) work?

The Terra blockchain operates using the Tendermint BFT consensus engine, which is a high-performance Byzantine Fault Tolerant (BFT) consensus mechanism. Validators stake LUNA tokens to participate in block production and transaction validation. The network is built with the Cosmos SDK, making it part of the broader Inter-Blockchain Communication (IBC) ecosystem, allowing it to seamlessly transfer assets and data with other Cosmos-based chains. Its key technical innovation was the mint-and-burn mechanism between LUNA and its algorithmic stablecoins (like the former UST):

• To mint 1 UST, $1 worth of LUNA was burned.
• Conversely, to redeem 1 UST for $1 value, 1 UST was burned and $1 worth of LUNA was minted.

This mechanism was designed to arbitrage the stablecoin back to its peg. Smart contracts on Terra are written in Rust and executed via CosmWasm, a WebAssembly-based virtual machine tailored for the Cosmos ecosystem.

What makes Terra (LUNA) unique and valuable?

Terra's uniqueness originally stemmed from its ambitious attempt to create a decentralised, algorithmic stablecoin system that was native to a high-throughput blockchain. Its integration with the Cosmos IBC protocol provided inherent interoperability, a significant advantage over isolated chains. The project also demonstrated strong capabilities in fostering a developer ecosystem, leading to popular applications like the former Anchor Protocol. Following the reboot, the value proposition of the new Terra (LUNA) chain rests on several factors:

• A Clean Slate and Community Resilience: The new chain represents a community-driven effort to rebuild without the baggage of the failed algorithmic stablecoin model.
• Proven Technology Stack: It retains the robust, scalable, and interoperable technology of the Cosmos SDK and Tendermint BFT.
• Developer Focus: The ecosystem is now incentivising builders to create sustainable DeFi, NFT, and gaming projects on a chain with a high-profile history and existing name recognition.

What is Terra (LUNA) used for?

The LUNA token is the lifeblood of the Terra blockchain, with several core utilities:

• Network Security and Staking: Users can delegate their LUNA tokens to validators to help secure the network. In return, they earn staking rewards from transaction fees and block emissions.
• Governance: LUNA holders have the right to participate in on-chain governance, voting on proposals that dictate the future development and parameters of the Terra protocol.
• Gas Fees: LUNA is used to pay for transaction fees (gas) when interacting with dApps and smart contracts on the Terra blockchain.
• Protocol Incentives: In the new ecosystem, LUNA is a primary tool for bootstrapping liquidity and incentivising developers and users within rebuilt DeFi applications.

How Is the Terra (LUNA) Ecosystem Developing?

The Terra ecosystem is in a phase of cautious rebuilding and diversification after the 2022 collapse. The focus has shifted decisively away from algorithmic stablecoins.

• DeFi Revival: New DeFi protocols are emerging, offering lending, borrowing, and decentralised exchange services, but with a greater emphasis on risk management and sustainable yield models.
• NFT and Gaming: There is growing interest in developing NFT marketplaces and blockchain gaming projects on Terra, leveraging its fast and low-cost transactions.
• Interchain Future: As a core member of the Cosmos ecosystem, Terra's long-term health is tied to the growth of the Inter-Blockchain Communication (IBC) protocol. Success depends on attracting developers and users with compelling applications that can compete across the interconnected Cosmos "Internet of Blockchains."

How to mine Terra (LUNA)?

Terra (LUNA) cannot be mined in the traditional Proof-of-Work sense. It uses a Proof-of-Stake (PoS) consensus mechanism. The process of earning new LUNA tokens is called staking. Here’s how you can participate:

• Acquire LUNA tokens from a cryptocurrency exchange.
• Transfer your LUNA to a non-custodial wallet that supports Terra staking, such as Terra Station.
• Choose a validator from the list and delegate your LUNA tokens to them.
• In return for helping to secure the network, you will earn staking rewards, which are distributed from network fees and inflationary block rewards.

How to keep your LUNA Coin safe?

Securing your LUNA tokens is paramount. Here are the best practices:

• Use a Hardware Wallet: For long-term storage of significant amounts, a hardware wallet like Ledger (with the Terra Station app) is the gold standard, keeping your private keys offline.
• Employ a Reputable Software Wallet: For active use with dApps on Terra, consider a non-custodial software wallet like Terra Station (the official wallet) or Keplr, which is popular across the Cosmos ecosystem.
• Guard Your Seed Phrase: Never share your 12 or 24-word recovery seed phrase with anyone. Store it physically in multiple secure locations.
• Beware of Scams: Be extremely cautious of unsolicited offers, fake support channels, and phishing websites pretending to be Terra Station or other services.

How to buy LUNA Coin?

LUNA is a cryptocurrency listed on many exchanges. However, it is recommended to trade on a major platform like BTCC for higher liquidity and better customer support.

1. Register a BTCC Account: Sign up using your email or mobile number and complete the KYC verification to unlock more features and benefits of the platform.
2. Deposit Funds: Deposit fiat currency (via bank transfer, card, or third-party payment) or transfer USDT from an external wallet into your BTCC account. You can follow this guide.
3. Start Trading: Go to the trading page and search for the spot trading pair LUNA/USDT or the perpetual contract LUNA/USDT.
4. Place an Order: Enter the amount of LUNA you wish to purchase and submit the order. For contract trading, you can also choose to go short (sell) and adjust the leverage multiplier according to your strategy and risk tolerance.
5. Confirm Your Purchase: For spot purchases, check your personal account to see if the coins have arrived. For contract trades, check the trading page to see if your order was filled successfully.