Guides Regarding Terra LUNA Are: Terra, LUNA, and LUNA 2.0

TerraLUNA the last few moments have taken the world by storm blockchains. How not, In the last 24 hours of its release, the LUNA token has recorded an increase of more than 200% and outperformed the broader market.

Terra's community investors have also made a strong buyout of LUNA over the proposed 1.2% tax burn from Terra Classic (Lunc) network. 

However, what exactly is Terra LUNA? Next, VCGamers will discuss in detail about Terra LUNA.

Also Read: 4 Terra Luna Trading Places You Need to Note

Terra LUNA: Explanation of Terra and LUNA

A Brief Explanation About Terra

Terra is blockchains open-source which hosts a dynamic ecosystem of decentralized applications (dApps) and top-tier developer tools. 

Terra used consensus proof-of-stake and breakthrough technologies such as the Mantle Mint, Terrain and Terra Station.

Terra Labs, developers from Terra, founded in 2018 by Do Kwon and Daniel Shin and launched its mainnet in 2019. 

Kwon and Shin built Terra to offer users the stability of fiat currency while leveraging the power of blockchain technology for settlements that are faster and cheaper than traditional payment solutions. 

The two founders also believe that such an option will increase blockchain adoption.

Older versions of the Terra protocol were extended to offer support for developers stablecoins to build decentralized finance (DeFi) project Terra. 

Explanation of Terra LUNA

The Terra project was divided into two cryptocurrencies namely Terra and LUNA. Terra is standard stablecoins pegged to fiat and other currencies. For example, TerraUSD (UST) is tied to the United States dollar, while TerraKRW (KRT) is tied to the South Korean won.

Terra LUNA is the native staking token of the Terra protocol. Users risking LUNA to get a place in the government and become a validator and get prizes.

Users can also “burn” Terra LUNA to mint UST Terra tokens or those tied to local fiat. However, it's important to note that though stablecoins these are tied to fiat values, they are not backed by fiat. 

Instead, LUNA tokens are considered as Algorithmic stablecoins. Algorithmic stablecoins are assets that acquire value through a set of rules rather than being tied to the asset itself. 

This method allows Terra users to invest in the price of linked coins without holding physical counterpart.

However, the value of the UST is exposed unpegged on May 9, 2022. This has caused its value to continue to fall after nearly 18 months of holding its value against the US dollar. 

Also Read: Terra Luna Predictions For September 2022

Terra LUNA 2.0

Terra finally created a new LUNA to restore the situation under the name Terra LUNA 2.0. Terra 2.0 is the latest version of Terra (LUNA), designed by Do Kwon as a regeneration strategy. 

The goal is to propose a fork of blockchains Terra and airdrop to investors crypto affected by the recent market downturn. The main goal is to restore trust in stablecoins this through the new Terra ecosystem venture.

Terra 2.0 policy occasionally issues additional LUNA tokens to crypto investors who purchase more than 10,000 LUNA prior to a major crash. stablecoins this.

 This will help keep Terra LUNA 2.0 from being sold outright. More than 300% tokens LUNA investors crypto will be opened all at once, with the remaining 70% issued over two years. These crypto investors will receive new Terra LUNA 2.0 tokens after six months.

Differences between Terra LUNA Classic and Terra LUNA 2.0

Terra LUNA classic and LUNA 2.0 are not the same, although they share some significant similarities. The Terra Network has been split into two chains under the new governance plan. 

Classic Terra with classic Luna token(LUNC) will be the old chain, while Terra with LUNA token will be a new chain called Terra LUNA 2.0.

Old LUNA will coexist with LUNA 2.0 rather than be replaced entirely. Every decentralized application (DApps) launched for Terra Luna will compatible for LUNA 2.0.

The development community will start building DApps and providing utilities for the new token. However, this is not included Algorithmic stablecoins.