In Terra: Tech mistake|Blockchain technology has been highly successful since it was first introduced along with cryptocurrencies such as Bitcoin, Ethereum, and many others. This is because it keeps a record of all transactions made. This record cannot be altered and blockchain also has the feature of a smart contract. The Terra blockchain network is one of the latest blockchain projects which mainly focuses on Stablecoins, cryptocurrencies, the value of which is pegged to the value of fiat currencies.
The Terra protocol was first introduced in January 2018 by Terraform Labs, a blockchain enterprise based in Korea. Despite Terra being around only for a very short time, its native token LUNA is already one of the leading cryptocurrencies in terms of market capitalization. The Terra blockchain network continues to attract new crypto enthusiasts because of its exciting projects and rewards for stakes. In Terra.
The Terra blockchain is supported by two key Terra currencies, LUNA and Terra. These two coins are analogous to one another in the way the Earth and the moon are — hence the terms Terra and Luna which in Latin mean Earth and moon respectively. There are multiple other currencies supported by the Terra blockchain some of which have a value that is pegged to the south Korean won, the US dollar, or the Mongolian Tugrik.
How does Terra Stablecoins work?
Many of the decentralized algorithmic Stablecoins available in the market such as Fei protocol, and Ampleforth rely on methods including collateralization and changing the fiat currency the coins are pegged to for growth. Terra Stablecoins on the other hand leverage elastic monetary policy for both stability and growth. This is why the Terra blockchain has enjoyed steady growth over the last couple of years. You too can join the amazing Terra community by signing up with Loop and earning amazing rewards as well. In Terra.
The Terra blockchain aims to achieve price stability by regulating supply depending on demand and fluctuations. To achieve this, they use tokens of Terra and Luna to achieve stability in case any of their Stablecoins deviate from their pegged fiat currencies. The Luna token in this case is used as a tool to counter volatility but stickers can earn rewards from transaction fees collected.
How does the Terra blockchain work?
Many of the famous blockchain networks like Bitcoin function using the Proof of Work mechanism. The Terra blockchain on the other hand uses the Delegated Proof of stake mechanism. The network relies on 130 validators who are responsible for verifying and settling transactions, as well as ensuring the network is secure by adding nodes to the blockchain. Terra plans to increase the number of validators in the coming days to 300 which will be determined by the size of stake delegated. In Terra.
Validators on the Terra blockchain are like miners in the proof of work blockchain networks. In order to be a validator in the Terra blockchain, users can either lock up their Luna tokens for at least 21 days or get other users to delegate their Luna stakes. .
Decentralization and the future of the Terra blockchain
Current Terra relies on just 130 validators which means it is not one of the most decentralized blockchain networks. However, with the number of validators set to be increased to 300 soon, the Terra blockchain will certainly become one of the most decentralized networks. In Terra.
Currently, Terra is focusing on achieving optimal performance, scalability, and interoperability while making a compromise on the decentralization part. Terra is set to introduce the new Columbus 5 upgrade which will propel Terra to become one of the top blockchain networks in the market.