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How Does Terra (LUNA) Work?

Terra is a blockchain that allows users to create stablecoins indexed to fiat currencies. The Terra blockchain was developed at Terraform Labs, which was founded in 2018 by Do Kwon and Daniel Shim. LUNA is the network's embedded cryptocurrency.


Setting off with the motto of programmable money for the Internet, Terra is an open source stable cryptocurrency network controlled by its stakeholders. Terra is a blockchain that allows users to create stablecoins indexed to fiat currencies. With the smart contract feature on the Terra blockchain, stable cryptocurrencies indexed to fiat currencies such as Dollar, Euro, South Korean Won can be created. All stable cryptocurrencies in the Terra network can be exchanged with LUNA.


LUNA balances the price volatility of stable cryptocurrencies created on the Terra blockchain. It also allows you to have a say in the governance of the platform. In addition, LUNA is also used for transaction fees within the network. LUNA can also be used for revenue sharing by locking with the DPoS (Delegated Proof of Stake) consensus protocol.


In order to ensure that the value of stable cryptocurrencies indexed to fiat currencies is the same, their supply is increased or decreased according to demand. LUNA is used to maintain this supply-demand balance.


How to Get Terra (LUNA)?


Terra blockchain uses the Proof of Stake protocol. Users lock their LUNAs to confirm blocks on the network. Once the network is secured, a LUNA is earned as a reward in return. Nodes that lock the highest amount of LUNA gain the right to be validators in the network. These individuals earn LUNA in return by verifying the security of the network and the blocks.


Another method that users can use to earn LUNA is the delegation process. LUNA is a cryptocurrency that works with the Delegated Proof of Stake method. When users do not have enough LUNA to perform verification, the system can give the right to represent itself to an authenticator that it will agree on. The verifier performs the verification process in return for a certain commission. With this action, the user can win the LUNA reward as a validator.