For stable currency enthusiasts, the time and currency invested today are flexible and diverse, and are not limited to stable currency supported by legal currency. There are various methods and networks to link with stable currency. Terra is one of them. It has developed a unique method for stable coins. Developers can create their own hook tokens through Terra. So, what is Terra? What ecological projects does Terra have? Next, let's take a look.

What is Terra (LUNA)?

Terra is a blockchain network built by applying Cosmos SDK and is committed to establishing stable currency. Terra stable currency does not use legal currency or over-collateralized cryptocurrency as reserve, but is converted into the network's native token LUNA. LUNA allows the holder to pay the network fee, participate in the rectification, pledge and link with the stable currency in the Tendermint entrusted equity certification consensus mechanism. In order to link with stable currencies such as Terra USD (USD), the dollar value of LUNA can be exchanged with USD tokens at a ratio of 1:1. For example, the price of UST is US $0.98, and the arbitrageur uses one UST to get US $1 to get the difference of 2 cents. Such systems increase the demand for UST and reduce its supply, because UST can be destroyed.

Then, the stable currency will return to the hook status. When the value of UST is higher than US $1, assuming US $1.02, the arbitrageur can convert US $1 LUNA into one UST to get 2 cents. The supply of UST is increased, the demand is reduced, and the price returns to the hook. In addition to reducing the volatility of the stable currency, the verifier and trustee also obtain rewards by pledging LUNA. These two roles are particularly important for maintaining network security and determining transactions. LUNA can be purchased through Coin, and then pledged and participated in the renovation by using Terra Station (the official wallet and control panel of Terra blockchain network).

Terra Ecological Project List

Terra initially wanted to establish a decentralized payment and settlement method, and to overcome the high volatility of digital currency assets, so UST appeared. At the beginning, UST was used for e-commerce payment. It solved the problem of slow and high cost of traditional financial settlement and gave Terra a place in the electronic payment industry.

Speaking of UST, LUNA is definitely indispensable. It is the original pledge property that adds power to Terra's ecosystem to verify Terra's transactions and forge UST at Terra Station. In addition to the real business application field, UST is also widely used on the Terra chain. It can complete the borrowing function through Anchor, and use Mirror to carry out global property transactions. In addition, Terraswap brings the conversion of various digital currencies on the Terra chain.

The following will briefly introduce various ecosystems on Terra chain:

1、Terra Station

Terra Station is the key to Terra. Customers will pledge their LUNA here to participate in the verification transaction and remediation, and get the reward of transaction costs. In addition, customers can also exchange LUNA with UST through Terra Station. You can think of it as similar to the emergence of the Federal Reserve, but it is different from the traditional way that the market controls the money supply with bonds and interest rates. Terra uses the algorithmic market module to encourage the forging and combustion of UST according to the arbitrage opportunities of price differences generated by price fluctuations, so as to achieve the effect of expansion and contraction.

Terra is a blockchain adopting the proof of interest system. The verifiers obtain the right to submit new blocks according to the pledge of LUNA by Terra Station. They undertake to maintain the entire blockchain to ensure the accuracy of each transaction. At the same time, the verifiers also play an important role in the regulation of the agreement. Because the agreement only allows the top 130 verifiers to participate (the ranking of verifiers is determined by the total amount of LUNA pledged under their account), and it requires 24 hours of online access, so general customers can only rely on the identity of the principal to participate if they want to get the reward for submitting the new block. The consignor will pledge their LUNA to the verifier, increase the total pledge amount of the verifier, and receive part of the transaction costs as their pledge reward.

As shown in the figure, users can see relevant information about Terra chain and its LUNA in Terra Station. Select the verification node to pledge LUNA according to the role of staking; Swap burning LUNA to forge UST, or burning UST to replace LUNA; Governance plays a role in the regulation of the agreement.

2、Anchor

Anchor is a mortgage loan agreement on the Terra chain. You can consider it as a bank in the Terra ecosystem and borrow here. Anchor's characteristic is that he ensures that the deposit interest rate of UST depositors is close to 20%, so that users can obtain stable profits as long as they deposit at a fixed time (unlimited). The profit sources are the POS profit (bLUNA and bETH) of the pledged assets in the agreement, the interest paid by the lender, and the mining profit.

For the lender, in addition to converting LUNA into bLUNA as collateral property, Anchor also works with Lido to project the stETH generated by the pledge of ETH2.0 in Lido agreement onto the Terra chain as collateral asset. In addition, Anchor also provides the lender with a reward for mining, so that the lender can make loans in the form of low cost and even income.

At present, the net loan interest rate is 1.49%, and the loan interest rate is reduced by 18.52% by 20.01% of the allocated mining interest rate, which means that the lender can still make profits after lending.

Note: After the mortgage of bLUNA and bETH, the corresponding LUNA and ETH profits will not be received. This is because LUNA is pledged to the verifier to obtain a reward for Terra's on-chain transaction costs, and ETH is pledged to ETH2.0 to obtain an ETH pledge reward, and these two rewards will be distributed to depositors as pledge profits.

3、Mirror

Mirror is a derivative agreement on Terra's chain. According to it, it can forge global property with UST, not only digital currency, but also shares (Apple, Tesla, etc.), commodities, etc. You can think of Mirror as a comprehensive exchange.

Just like the name of Mirror, the property forged according to UST is only a projection in reality. The customer does not own the property, even BTC and Ethereum in the agreement.

The customer wants to forge the property he wants to hold on the Terra chain. As long as he mortgages the UST into the agreement through the role of Borrow, he can generate the property assisted by various agreements. You can also directly trade various properties in the agreement through Trade. This means that users can simply use UST to achieve the effect of long or short global property in the agreement, and can trade 24 hours without space and time constraints, which is very convenient and efficient. In addition, users can also use their own property to do long or short mining in Farm, and get extra MIR token rewards.

4、Terraswap

For DEX on the Terra chain, users can trade any token with liquidity in the agreement according to Terraswap.

5. Astroport

An agreement that also brings more transaction depth to the native project tokens on the Terra chain.

It can be seen that in the first stage of the project's preparation to go online, the reward trading pairs provided are almost all original projects of Terra chain, and have reached a lock-in of 1 billion USD in just seven days.

At present, Astroport is about to enter the second stage. According to the ASTRO reward issued in the first stage, the original ASTRO-UST transaction pair that will be locked for three months (linear opening) will be provided to obtain more rewards. However, after the completion of the second phase, Astroport will officially go online and allow transactions.

Speaking of this, I believe you have a certain understanding of Terra and its ecological projects. In general, Terra is very different from other mainstream public chains. It is based on UST, connects the blockchain and reality, and allows ordinary people to participate according to daily payments without knowing it. But Terra is not only a stable currency offering agreement, but also develops its own DeFi ecosystem with financial infrastructure such as savings, trading and investment, derivatives, etc. I believe that under the circumstances of Terra's active cross-chain construction, more UST use scenarios will be created, and the impact of UST will be wider and wider, let's wait and see.