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Terra Crypto PNG Transparent Images

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Submitted by on Sep 3, 2021

Terra is a decentralised financial payment network that uses the blockchain to reconstruct the traditional payment stack. To allow programmable payments and the creation of open financial infrastructure, it uses a basket of fiat-pegged stablecoins that are algorithmically stabilised by its reserve currency Luna. The network has transacted an estimated $299 billion for over 2 million members as of December 2020.

What Is Luna?

The Terra system is built on a Proof of Stake (PoS) network, which means that in order to mine transactions, miners must stake their Luna. In the absence of additional factors, a validator who has staked more Luna has a better probability of producing the next Terra block than one who has staked less. Luna indicates the mining power of a validator.

Luna holders and stakers, on the other hand, are exposed to the asset’s price risks by providing network security and validation. This is because, in order to keep the peg, the Terra protocol quickly trades Terra stablecoins for Luna at a predetermined exchange rate. It will trade stablecoins for Luna when demand is great and prices are above the peg. It has the opposite effect when demand is low and prices are below the peg. Validators absorb the network’s short-term instability in this way.

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Validators are compensated in the following ways: I staking rewards, ii) gas costs, iii) taxes, and iv) seigniorage rewards. Staking incentives are based on a validator’s stake level and are designed to encourage increased transaction volume. Gas costs and taxes are similar in that all Terra transactions are subject to a modest pro-rata charge paid to validators. Finally, validators who participate in the Luna exchange rate oracle procedure get seigniorage benefits.

These incentives are intended to generate mining demand that is consistent and evergreen regardless of economic situations. The protocol reduces network costs and seigniorage rewards when rewards rise, and vice versa. Terra’s Docs website and its whitepaper include more information about Luna and her rewards.

Where And How Do I Obtain Luna?

Luna is available for buy on cryptocurrency exchanges including KuCoin and Huobi. The supplied link will take you to a list of centralised and decentralised bitcoin exchanges. Alternatively, the markets tab on this website includes a list of all the exchanges that trade Luna pairings right now.

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