LUNA coin is used for
- Staking to validate blocks
- Staking to provide price feeds
- Keep Terra currencies at their peg
What is Terra?
How it works
Terra uses PoS Tendermint BFT consensus.
- dPoS-like scheme driven by a set of 100 top validators.
- Blocks every 6 seconds.
- Miners need to stake LUNA to mine Terra transactions.
- At every block period, the protocol elects a block producer from the set of staked miners, weighted by the size of the active miner’s Luna stake.
Terra stable currencies
- Pegged to USD, EUR, CNY, JPY, GBP, KRW, and the IMF SDR.
- Users can convert TerraKRW for TerraUSD instantly at the effective KRW/USD exchange rate.
Oracle price feeds
- For any Terra sub-currency – TerraKRW, TerraUSD, TerraSDR – miners submit a vote for what they believe to be the current exchange rate in the target fiat asset.
- Taking the weighted medians as the true rates.
- Those who voted 1 standard deviation of the elected median are rewarded. Those who voted outside may be punished via slashing of their stakes.
The system uses Luna to stabilize the price of Terra currencies by agreeing to be counter-party to anyone looking to swap Terra and Luna at Terra’s target exchange rate.
- Price < 1 SDR, users and arbitragers can send 1 TerraSDR to the system and receive 1 SDR’s worth of Luna.
- Price > 1 SDR, users and arbitragers can send 1 SDR’s worth of Luna to the system and receive 1 TerraSDR.
- Volatility is moved from Terra price to Luna supply.
- This Luna dilution presents a problem for miners; their Luna stakes are worth a smaller portion of total available mining power post-contraction.
- The system burns a portion of the Luna supply until it has reached its 1 billion equilibrium.
- Transactions fees default to 0.1% and are capped at 1%.
- When demand for Terra increases, the system mints Terra and earns Luna in return. This is called seignorage.
- Miners voting within the median for price feeds of price earn rewards from the seignorage.
- The system burns a portion of earned Luna, making mining power scarcer.
More in whitepaper.
LUNA coin issuance
Token Price: $0.8
Sale of total supply: 20%
Current supply: 997,406,367 LUNA
What’s the story?
- Payments made simple
- Price stable currencies