Terra is a blockchain protocol built to tackle the problem of cryptocurrency price swings. It was launched in 2018 by the Korean blockchain company Terra Labs. One major obstacle to using cryptocurrencies for payments or day-to-day transactions is volatility. Terra works to address this by enabling reliable stable payments and open financial infrastructure. It does so through a flexible monetary framework that supports price-stable cryptocurrencies, each pegged to different fiat currencies. The blockchain is powered by Terra (LUNC), which also serves as the governance and staking token backing Terra’s stablecoins and payment systems.

What are LUNC key features and how does it work?

Terra’s adjustable design helps produce self-correcting stablecoins along with other distinct capabilities for the market. The network supports a broad range of stablecoins linked to FIAT currencies, including TerraUSD (USTC), TerraSDR (SDT), TerraKRW (KRT), and TerraMNT (MNT).

Terra relies on an elastic money supply approach. When demand for a specific fiat currency rises-pushing up the value of its corresponding Terra stablecoins-the elastic supply mechanism activates to restore balance and prevent the asset from drifting away from its peg. Arbitrage can further contribute to stability. Traders help by buying and selling stablecoins across different venues at the same time, which encourages prices to return to the pegged level.

The main role of the LUNC token is to help safeguard the network by locking value inside the Terra ecosystem through staking. In parallel, LUNA holders take on the price volatility risk tied to the LUNA token itself. Terra’s staking rewards therefore serve as an incentive for LUNA holders to accept these risks and remain invested for the long term. Terra coin rewards are distributed through the Terra Protocol-first to validators on the network, then onward to individual delegators. Reward size depends on the staked amount and grows as more network transactions occur.

Mirror is a DeFi protocol built on smart contracts using the Terra blockchain. Launched in 2020, it supports the creation of synthetic assets called ‘mAssets’ (Mirrored Assets). In practice, mAssets track the price movement of real-world assets on-chain, giving traders exposure without needing to own the underlying assets.

Anchor is a savings protocol within the Terra network that targets low-volatility returns on Terra stablecoin deposits. Its yields are comparatively steady because they are backed by a range of staking rewards from major proof-of-stake blockchains, which can make them more stable than typical money market interest rates.

What is unique about Terra?

Terra combines stablecoins with a native staking currency, offering a different method than many other stablecoins that use a fiat-collateralized peg. This setup provides more than a stable mechanism for transactions: it also allows users to earn yields by holding the staking coin, while the system aims for stronger decentralization overall. The staking asset also functions as collateral. Provided there are enough transaction fees, Terra can cover the expenses tied to its decentralized operations and associated risk compensation.

Where can you buy LUNC?

You can buy LUNC on the CEXs and DEXs shown in the market tab. Common options include Binance, OKEx, and KuCoin.