Ho Chang Tat
LUNA - TeFi is the new DeFi?
1. What is Terra and $LUNA?
Terra is created by a Korean blockchain company, and it is a protocol that creates stable coins pegged to various fiat currencies. These are also known as stablecoins.
The native cryptocurrency coin of the Terra ecosystem is $LUNA. $LUNA is burnt to mint stablecoins.
Their most popular stablecoin is UST.
5th Largest stablecoin after USDT, USDC, BUSD, DAI
Market cap of around 2 billion
Founders:
Do Kwon
Holds a degree in computer science from Stanford
Made the Forbes 30 under 30 list in 2019
Daniel Shin
Graduate of Wharton School of Economics
Founder of TMON, Fast Track Asia and Chai Payment
2. What problem does it solve?
Creation of decentralised algorithmic stablecoins
Acts as a transition from fiat to pure cryptocurrencies
3. Use Cases
1. Chai Pay - Payments (like VISA)
2. Anchor Protocol - Savings
3. Mirror Protocol - Equities (like Robinhood)
Chai Pay
Chai is a payment processor integrator.
It helps E-Commerce companies by helping them integrate all kinds of digital payments easily instead of one by one.
It helps consumers to easily pay for items online by simply adding their bank account, similar to using PayPal.
On the frontend, using chai is simple and users deal with fiat instead of crypto, users don’t need to interface with complicated crypto actions such as private keys, wallet addresses, etc.
Using existing payment processors, the settlement time is from 3 - 14 days to use the funds you earn.
This is a problem for many day-to-day businesses like transportation, F&B, where you need the money you earn immediately, to buy food and fuel the next day.
Terra settles in 6 seconds with lower fees.
One of the most used decentralized applications. Over 2 million users and is the number 3 most used dapp.
Settles payments in KRT, which is the Terra stable coin pegged to the Korean Won. The more KRT is needed, the more $LUNA is burnt to mint KRT.
Source: https://www.dapp.com/dapps?sort=2&time=0&type=0
2. Mirror Protocol
Allows users to mint tokens that mirror the prices of stocks and other assets
Minting these tokens require depositing 150% of UST value as collateral
TVL : $1.9B
3. Anchor Protocol
Created by Terra, Solana, Polkadot and Cosmos
Savings protocol offering low-volatile yields on UST deposits
More stable rates than money market interest rates
High interest of 19%
Powered by staking rewards from major POS blockchains
TVL: 684 million UST
Below is the current roadmap (as of 29 Jun 2021) of how the entire Terra Ecosystem will look like.
Conclusion
As more projects are built on Terra, demand for UST grows, more LUNA gets burned, LUNA market cap goes up.