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With the crypto market being notoriously unstable, many projects seek to introduce a solution that will allow users to send and receive coins with a stable value. While Tether and its stablecoin, USDT, have to an extent dominated (and still dominate) this market, there are now a variety of other options available to cryptocurrency users. The blockchain project Terra has come out with one such solution. In this article, we will take a closer look at the LUNA coin, its key use cases, and try to understand whether it can be considered a good investment option.
Terra (LUNA) is a blockchain protocol created to develop stable cryptocurrencies and a transparent financial infrastructure, focused on payments and smart contracts. Its key goal is to replace payment chains that include banks, payment gateways and credit card networks.
One of the main barriers preventing cryptocurrencies from gaining mainstream adoption is their price volatility. In the crypto market a coin can rise or fall by 20% or more in a single day. Terra is trying to resolve this issue by creating crypto tokens with stable prices that are tied to fiat currencies. It uses a price stabilizing algorithm that changes the money supply of an asset to restore its value. This can enable lower fees, increased stability and cross-border exchanges.