Terra (Luna): What It Is & How to Deal with It

Luna is the token of the Terra network. But these days, it is divided into two categories:


one, the Luna Classic, which represents the token related to Terra 1, and Luna 2.0.


TerraClassic or Terra 1 is related to the time before May 2022 when the network of the


same name crashed due to an evil genius attack caused by a massive sell-off of the Luna


token of that time which is now known as Luna Classic. However, Luna is not the only


token of the Terra network; TerraUSD is another token designed to play the role of a


stablecoin. The stablecoins are pegged to US Dollar. Although you might think that the


price of the TerraUSD must be one Dollar, in fact, because of the mentioned crash, the


cost of the token at the time of writing is 0.057 Dollars, which is why it is now called


TerraClassicUSD. The new Terra version, released shortly after the crash, had no


stablecoin to be replaced. Also, the new network released an airdrop for the Terra 2.0


network called Luna 2.0, and the name of the previous Luna was changed to LunaClassic.


In this article, we will introduce the Terra(Luna) token, the purpose of the network, the


challenges you might face investing in it, and the precautions you should take before


making any decisions about trading its tokens.

What Is Terra LUNA?

As we mentioned earlier, Luna is the token of the Terra network. However, these


days we have two kinds of Luna: 1. LunaClassic, which is related to the TerraClassic


network, and 2. Luna 2.0, which is associated with the new fork of the Terra network.


Terra is a Defi protocol on Blockchain that powers the universal payment


systems based on fiat currencies using the fiat-based stablecoins. This protocol uses


a mixture of wide adoption of stablecoins and, at the same time, censorship


resistance of Bitcoin. Terra is built on Cosmos SDK and Tendermint. The main


language in which the Terra smart contracts are written, is Rust. However, there are


SDKs for python and JavaScript and creating the smart contracts called


CosmWASM Smart Contracts.


If you are eager to get familiar with how you can interact with Terra smart


contracts and also how to create and sign the transactions using this network, we


have provided several tutorials on this subject, not to mention that we have written


an entire article about the new fork of this network, the changes that have been


made, and some important notes for developers who want to interact with this new


version of the network.

Introducing the tokens of the terra network

The main tokens of Luna before the May 2022 crash were Luna and TerraUSD and


some other stablecoins like TerraCNY (Chinese yuan), TerraEUR (Euro), TerraBGP


(British Pound), TerraJPY (Japanese Yen), TerraKWR (South Korean Kwon), and


TerraSDR (the International Monetary Fund). After the crash, in the new fork, there


were stablecoins and only a token called Luna 2.0. Also, the pre-crash stablecoins


names were changed to their original name plus classic as a post-fix, for instance,


TerraEURClassic.

Luna classic classic vs. luna 2.0

Terra became popular first because it was a user-friendly platform for electronic


cash. The popularity of this e-commerce platform raised in South Korea because it


offered lower transaction fees. The use cases of the Terra network do not just boil


down to payments. Additional applications are considered for this network. These


applications include lending, borrowing, insurance, investing, and charitable causes.


There are several applications built on top of the Terra blockchain. These


applications include Anchor protocol, Chai, and Mirror Protocol. Anchor works like a


bank, and its leading cause is for lending and borrowing purposes. Chai is a


payment rail of the Terra network that lets users and merchants send and receive


Arashtad.com Design and development solutions


arashtad


UST. The Mirror Protocol is a decentralized finance (Defi) platform that allows users


to create and trade “mirrored assets” that "mirror" the price of stocks.

Is Terra ( luna) A Good Coin?

Luna was considered one of the most promising tokens of the coin market cap, and


just before its crash, it became one of the top ten cryptocurrencies in terms of its


market cap. However, after the May 2022 crash and the de-pegging of its stablecoin


from the US Dollar, sell-off pressure caused the price to plunge magnificently, ending


up in a huge doubt among its fans, investors, and holders. The LunaClassic and


Luna 2.0 are both in the market, but the market cap of both tokens does not show a


promising future compared to the pre-crash all-time highs.


Many people may say that the current price of the wrapped Luna Classic is


0.01 percent of its all-time highs, and if we invest now, our asset gets the chance of


getting 10000 times more. But the truth is, the market cap is not 5 percent of its alltime highs, which means in the best-case scenario, we will only see the price getting


40 times more. Moreover, the mentioned best-case scenario is of a very low


probability cause most traders are not sure about the network and are scalping


rather than holding the tokens for long periods. Even if the network recovers after


some good news gets published, there is a long road to get there because the


network's reputation has been challenged many times in the last few months, and


this is not about some kind of dumping news. The situation is more serious than that.


So make sure you trade with precautions.

Conclusion

In this article, we have got familiar with the Terra network, its purpose, history, the


most recent fork, and its tokens. Furthermore, we got to know some other tokens


built on top of the Terra network. We also reviewed the latest crash of the


network's main token, Luna, and the precautions you should take when trading


these tokens.

Download this Article in PDF format

Arashtad Custom Services

In Arashtad, we have gathered a professional team of developers who are working in fields such as 3D websites, 3D games, metaverses, and other types of WebGL and 3D applications as well as blockchain developemnet.

Visit Our Services

Arashtad Serivces

Drop us a message and tell us about your ideas.

Fill in the Form

Blockchain Development
https://blog.arashtad.com/blog/terra-luna-what-it-is-how-to-deal-with-it/