Terra continues growing ?
The blockchain created specifically for the decentralized dollar-pegged stablecoin Terra USD (UST), and which has since become a popular playing ground for the DeFi projects, is about to enter a whole new level.
Terra’s founder Do Kwon has recently announced the company’s buying over $10Bn in Bitcoin to backstop short-term UST redemptions and fill a decentralized forex reserve.
Terra USD is algorithmic, with the stablecoins achieving 1:1 conversion rate with the dollar via an elastic money supply (contracting and expanding when price deviates from the peg), enabled by stable mining incentives (miners absorb supply contraction costs in the short term and are compensated with increased rewards in the mid to long term).
Terra uses a PoS consensus, which means that miners must stake its currency LUNA to add transactions to the blockchain. The algorithm also uses LUNA to balance the USD peg in miner incentives, and users burn it to pay for minting stablecoins (thus reducing the overall supply, which is always a good thing for the price).
Terra is developing quickly and has recently become the second-biggest blockchain in terms of staked value: almost $30Bn of LUNA is already locked up in the protocol. LUNA price has reached its all-time high on March 9th, defying the general trend in the crypto markets.