Luna - cryptocurrency for e-commerce settlements

Luna is a cryptocurrency that allows the Terra project to operate. It appeared two years ago and is currently one of the largest cryptocurrencies in the world with a capitalization of more than USD 7 billion. What is it, how does it work and what makes the cryptocurrency driving it more expensive by 10664% over the year?

We continue the cycle of the Forex Club portal, in which we analyze and describe the largest, highest-valued, most interesting, most developmental, advanced and also the most controversial cryptocurrency projects around the world. Today it's time for Luna - a cryptocurrency that reaches the moon not only by its name.

How the Terra project works

Terra is based on blockchain technology a settlement platform, including in the world of e-commerce. The key here is the cost of the transaction, which, thanks to modern solutions, is cheaper than PayPal, online payments or credit cards. 

Millions of users already use the platform based on stablecoins. How do they help stablecoiny? They are usually reflected in traditional currencies - such as the US dollar. Therefore, on the one hand, they have all the advantages of cryptocurrencies, but their price is not subject to great fluctuations. However, Terra openly admits that there are no reserves to cover the value of the stablecoins. So how can it work? It must be remembered that the platform supports several stablecoins at the same time and there are more and more of them. 

This is where the Luna token has its role. Its holders vote and choose more stablecoins to join the platform. They are all created in the same way - by exchanging for the equivalent in Luna tokens. After that, each stablecoin can be exchanged for another. So there is only one liquidity, but how to keep the price of stablecoins in the face of suddenly growing demand or supply? After all, there is no collateral in fiat currencies. It turns out that ... the participants themselves care about the balance. 

The SDT token helps in this, which is a kind of reflection of the value of all stablecoins - it's a basket of stablecoins. Its price is set externally - based on the prices of all fiat currencies, which are reflected in stablecoins. So there is an opportunity for arbitrage - every time the demand for a particular stablecoin increases or decreases. It is easy to guess that the rest is done by "the invisible hand of the market".

Uses of the Luna token

First of all, Luna token holders can become network nodes and earn money by securing network transactions, or donate their tokens to one of the 100 validators who have the most tokens. Staking now produces a few percent of the profit per year. 

However, you do not need Luna tokens to use the network. Transactions are settled in all stablecoins operating on the network. 

More can be earned on projects that are created within the Terra blockchain. E.g MirrorProtocol awarded people who staked Luna tokens, but new units will also be transferred to them for the next few years. Other projects announce similar solutions.

The Terra network is also developing service smart contractsthat have been operating in it since November 2020. It is also possible to create decentralized applications on the Terra blockchain, also based on decentralized finance.

Luna cryptocurrency quotes

Currently, the Luna cryptocurrency can be traded on 20 cryptocurrency exchanges from around the world. As of April 06, 2021, you would have to pay $ 17,80 for each Luna unit. There are 386 units in circulation, out of a target of 665 units, representing a market capitalization of $ 899 billion. The daily turnover exceeds USD 998 million. The peak of trading took place on March 316, 915, when each Luna was paid $ 7.