Terra LUNA
About
What Is Terra 2.0 (LUNA)?
Terra (LUNA) is a public blockchain protocol that emerged from Terra Classic. Terra Classic is home to the algorithmic stablecoin TerraClassicUSD (UST). It's now-renamed LUNC token collateralized UST, which crashed in a bank run in May 2022. That devalued LUNA to virtually zero and caused a launch of a new chain — resulting in Terra Classic and Terra. Read a full breakdown of the Terra crash here.
The development of Terra Classic launched in January 2018 and the blockchain launched in April 2019. It attempted to combine the price stability and wide adoption of fiat currencies with the censorship-resistance of Bitcoin (BTC) and offer fast and affordable settlements through its UST stablecoin. Terra Classic offered stablecoins pegged to the U.S. dollar, South Korean won, Mongolian tugrik, and the International Monetary Fund's Special Drawing Rights basket of currencies.
The new Terra blockchain continues the legacy of Terra Classic without the UST stablecoin. It will keep building with the help of the LUNA community dubbed “LUNAtics” and evolve the world-class UX and UI that brought Terra Classic up to second place in total value locked (TVL) at its peak. Many DApps have agreed to migrate to Terra to continue their functionality.
Who Are the Founders of Terra?
Terra was founded in January 2018 by Daniel Shin and Do Kwon. The two conceived of the project as a way to drive the rapid adoption of blockchain technology and cryptocurrency through a focus on price stability and usability. Kwon took on the position of CEO of Terraform Labs, the company behind Terra.
Prior to developing Terra, Shin co-founded and headed Ticket Monster, otherwise known as TMON — a major South Korean e-commerce platform. He later co-founded Fast Track Asia, a startup incubator working with entrepreneurs to build fully functional companies.
Kwon previously founded and served as CEO of Anyfi, a startup providing decentralized wireless mesh networking solutions. He has also worked as a software engineer for Microsoft and Apple.
After the collapse of Terra Classic, Do Kwon issued a revival plan that eventually led to the hard fork of Terra Classic and Terra. He received criticism for his plans from Binance founder Changpeng Zhao and Vitalik Buterin, as well as from disgruntled UST investors. His proposal was voted into effect by the community and Terra Classic hard forked into its new Terra blockchain on May 27, 2022.
What Makes Terra 2.0 Unique?
Terra will continue without its algorithmic stablecoin UST and aims to preserve the Terra ecosystem with hundreds of developers working on different decentralized applications. The LUNA token will be airdropped across Luna Classic stakers, holders, residual UST holders and essential Terra Classic app developers. Terra removed the wallet of Terra Foundation Labs for the airdrop event, making Terra a fully community-owned chain.
The airdrop will be carried out according to two snapshots taken, one before the Terra Classic crash (May 7) and one after it (May 27). The eligibility for the airdrop is as follows:
How Many Terra (LUNA) Coins Are There in Circulation?
Terra (LUNA) has a supply of 1 billion tokens. It will be distributed as follows:
- Developer mining program: 8%
- Essential app developers earn a share of the mining program proceeds pro-rata to the amount of TVL every quarter for 4 years.
- Developer alignment program: 1.5%
- Protocol teams that were live in Terra Classic divide this allocation weighted by the last 30 day TVL from Pre-attack snapshot - 1 year cliff, 3 year vesting thereafter. Accommodations will be made for apps where TVL is not applicable.
- Emergency allocation to app developers: 0.5%
- Immediately after network launch to provide for runway while they build out product. Commit to returning funds if product has not been launched in 1 year.
- Community pool: 20%
- Controlled by staked governance
- Pre-attack LUNA holders: 35%
- All bonded / unbonding Luna, minus TFL at “Pre-attack” snapshot; staking derivatives included
- For wallets with < 10k Luna: 30% unlocked at genesis; 70% vested over 2 years with 6mnth cliff
- For wallets with < 1M Luna: 1 year cliff, 2 year vesting thereafter
- For wallets with > 1M Luna: 1 year cliff, 4 year vesting thereafter
- Pre-attack aUST holders: 10%
- 500K whale cap - covers up to 99.7% of all holders but only 26.72% of aUST
- 30% unlocked at genesis; 70% vested over 2 years thereafter with 6 month cliff
- Post-attack LUNA holders: 10%
- Staking derivatives included
- 30% unlocked at genesis; 70% vested over 2 years thereafter with 6 month cliff
- Post-attack UST holders: 15%
- 30% unlocked at genesis; 70% vested over 2 years thereafter with 6 month cliff
Definitions:
- “Pre-attack” snapshot to be taken at at Terra Classic block 7544910 (2022.05.07 22:59:37+08:00)
- “Post-attack” snapshot to be taken at Terra Classic block 7790000 (2022.05.27 00:38:08+08:00)
All tokens locked or vesting are staked at genesis, and must be unbonded to become liquid.
Furthermore, Terra committed to burning the remaining 1B UST from the community pool to reduce the outstanding debt from the Terra ecosystem. The LUNA airdrop will happen on May 28, 2022, at 06:00 GMT.
How Is the Terra Network Secured?
The Terra blockchain is secured using a proof-of-stake consensus algorithm based on Tendermint, in which LUNA token holders stake their tokens as collateral to validate transactions, receiving rewards in proportion to the amount of LUNA staked. Terra will incentivize network security by providing staking rewards of 7% annual inflation. This is to align the interest of validators with the long-term success of the Terra ecosystem.
Where Can You Buy Terra 2.0 (LUNA)?
Several centralized exchanges committed to trading the new LUNA token, such as Huobi, Bitrue, Bitfinex, KuCoin, Gate.io, Bybit and LBank. Others are expected to follow soon.
Are you interested in buying LUNA or other cryptocurrencies such as Bitcoin? CoinMarketCap has an educational section — Alexandria — to teach you all about crypto and how to buy your first coins.
AI Analysis
What is the Terra (LUNA) cryptocurrency good for? What are its main use cases?
Terra (LUNA) is a decentralized, open-source blockchain protocol that utilizes a stablecoin, TerraUSD (UST), pegged to the value of fiat currencies like the US dollar. The main use cases of Terra (LUNA) are:
- Stablecoin ecosystem: Terra's primary use case is to support a decentralized stablecoin ecosystem, allowing users to create and manage stablecoins pegged to various fiat currencies. This provides a low-volatility alternative to traditional cryptocurrencies.
- Decentralized finance (DeFi): Terra's stablecoins can be used in various DeFi applications, such as lending, borrowing, and yield farming, providing a more stable store of value and medium of exchange.
- Cross-border payments: Terra's stablecoins can facilitate fast, low-cost, and secure cross-border payments, making it an attractive solution for international transactions.
- E-commerce and payments: Terra's payment system, TerraPay, allows merchants to accept payments in various currencies, including stablecoins, making it a viable option for e-commerce and in-store payments.
- Governance and staking: LUNA token holders can participate in governance decisions, such as voting on protocol upgrades and parameter changes. Additionally, LUNA can be staked to secure the network and validate transactions, earning rewards in the process.
- Oracle services: Terra's oracle system provides reliable and trustworthy price feeds, which are essential for DeFi applications and stablecoin management.
- Interoperability: Terra aims to enable seamless interactions between different blockchain networks, allowing for the free flow of assets and data between ecosystems.
The Terra ecosystem has experienced significant growth, with a wide range of applications and use cases emerging, including:
- Anchor Protocol: A DeFi platform offering high-yield savings accounts and lending services.
- Mirror Protocol: A decentralized platform for creating and trading synthetic assets.
- Chai: A popular payment app in Korea, utilizing Terra's technology for fast and low-cost transactions.
However, it's essential to note that the Terra ecosystem has faced significant challenges, including the depegging of UST in May 2022, which led to a substantial decline in the value of LUNA. As with any cryptocurrency or blockchain project, it's crucial to conduct thorough research and stay up-to-date with the latest developments before getting involved.
What blockchain does Terra use? Is it its own blockchain or built on top of another?
Terra originally operated on its own blockchain, known as the Terra Classic (LUNC) blockchain, which used a Proof-of-Stake (PoS) consensus mechanism. The native cryptocurrency of this blockchain was LUNA (now LUNA Classic, LUNC).
However, after the collapse of Terra in May 2022, a new version of the blockchain was launched as Terra 2.0, which is a separate blockchain with a new token, LUNA (LUNC was the old token, now called LUNA Classic). Terra 2.0 is also its own independent blockchain, not built on top of another.
Key Points:
- Terra Classic (LUNC) – The original blockchain that collapsed in 2022.
- Terra 2.0 (LUNA) – A new blockchain launched after the collapse, with a different token and governance structure.
- Not Built on Another Blockchain – Both versions of Terra operate as independent blockchains, not as layer-2 solutions or sidechains on top of Ethereum, Solana, or any other blockchain.
Would you like details on how Terra 2.0 differs from the original Terra?
Is Terra programmable? Does it support smart contracts or decentralized applications?
Yes, Terra (now Terra Classic, or LUNC) was a programmable blockchain that supported smart contracts and decentralized applications (dApps) through its Cosmos SDK-based architecture. However, its capabilities were somewhat limited compared to Ethereum or other major smart contract platforms.
Key Features of Terra (LUNC) for Smart Contracts & dApps:
Cosmos SDK & Tendermint BFT
- Terra was built on the Cosmos SDK, which allows for modular blockchain development.
- It used Tendermint BFT for consensus, ensuring fast and secure transactions.
Wasm-Based Smart Contracts
- Terra supported WebAssembly (Wasm) smart contracts, similar to Cosmos Hub (CosmWasm).
- Developers could write contracts in Rust (via CosmWasm) or other Wasm-compatible languages.
Terra Station & Wallet Integration
- Developers could deploy and interact with smart contracts via Terra Station (the official wallet).
DeFi & dApp Ecosystem
- Before the collapse of Terra (LUNA/UST), it had a growing DeFi ecosystem, including:
- Anchor Protocol (for stable yield)
- TerraSwap (DEX)
- Mirror Protocol (synthetic assets)
- Many of these projects have since migrated to Terra 2.0 (LUNA) or other chains.
- Before the collapse of Terra (LUNA/UST), it had a growing DeFi ecosystem, including:
Limitations of Terra (LUNC) for Smart Contracts:
- Less mature than Ethereum or Solana in terms of developer tools and adoption.
- Smaller developer community compared to Ethereum or Cosmos chains like Osmosis.
- Post-collapse uncertainty—many projects moved to Terra 2.0 or other chains.
Terra 2.0 (New LUNA) & Smart Contracts
- The new Terra (LUNA) also supports smart contracts via CosmWasm and has a more active ecosystem.
- It has better interoperability with other Cosmos chains (via IBC).
Conclusion:
- Terra (LUNC) was programmable and supported smart contracts, but its ecosystem was smaller than Ethereum or Solana.
- Terra 2.0 (LUNA) is more actively developed and continues to support smart contracts.
- If you're looking for a Cosmos-based smart contract platform, Osmosis, Juno, or Secret Network might also be worth exploring.
Would you like details on migrating dApps from Terra Classic to Terra 2.0?
How fast are Terra transactions? What is the typical confirmation time and throughput (transactions per second)?
Terra (now part of the Terra Classic and Terra 2.0 ecosystems) was designed to be a high-performance blockchain with fast transaction speeds and low fees. Here’s a breakdown of its performance metrics:
1. Transaction Speed (Confirmation Time)
- Terra Classic (LUNC) and Terra 2.0 (LUNA) use a Proof-of-Stake (PoS) consensus mechanism, which allows for faster confirmations compared to Proof-of-Work (PoW) chains like Bitcoin.
- Typical confirmation time: ~4–6 seconds per block (though finality can be achieved in a few seconds).
- Finality: Transactions are considered final after a few blocks (~10–30 seconds for full security).
2. Throughput (Transactions Per Second - TPS)
- Terra Classic (LUNC) and Terra 2.0 (LUNA) can theoretically handle ~1,000–10,000+ TPS under optimal conditions.
- Real-world performance: Typically 500–1,000 TPS in practice, depending on network congestion and validator participation.
- Comparison:
- Ethereum (pre-Merge): ~15–30 TPS
- Solana (at peak): ~50,000 TPS (but with frequent outages)
- Terra: More stable than Solana but not as high as Solana’s theoretical max.
3. Factors Affecting Speed & Throughput
- Network congestion: High demand (e.g., during airdrops or DeFi activity) can slow down confirmations.
- Validator performance: More active validators improve speed.
- Block size & gas limits: Terra adjusts dynamically to maintain efficiency.
4. Comparison to Other Chains
| Chain | Avg. Confirmation Time | Max TPS (Theoretical) | Real-World TPS |
|---|---|---|---|
| Terra (LUNC/LUNA) | ~4–6 sec per block | ~10,000+ | 500–1,000 |
| Ethereum (Post-Merge) | ~12 sec per block | ~100+ (with rollups) | ~15–30 |
| Solana | ~400–500 ms per block | ~50,000+ | 1,000–3,000 (unstable) |
| Cosmos (ATOM) | ~5–7 sec per block | ~1,000+ | ~100–500 |
Conclusion
Terra transactions are fast (~4–6 sec per block) with high throughput (500–1,000+ TPS), making it competitive with other high-performance blockchains. However, real-world performance can vary based on network conditions.
Would you like details on specific use cases (e.g., DeFi, NFTs)?
How much data can I store on the Terra blockchain? Does it support on-chain data storage?
The Terra blockchain (now known as Terra Classic after the collapse of its algorithmic stablecoin UST in 2022) does not natively support on-chain data storage in the same way as some other blockchains (e.g., IPFS, Arweave, or Filecoin). However, you can still store data on Terra in a few ways:
1. On-Chain Data Storage (Limited)
- Smart Contract Storage: Terra supports smart contracts (via CosmWasm), which can store small amounts of data on-chain (e.g., key-value pairs).
- Transaction Data: You can encode data in transaction messages (e.g., memo fields), but this is not scalable for large datasets.
2. Off-Chain Storage with On-Chain References
- IPFS + Terra: Store large files on IPFS and reference the CID (Content Identifier) on-chain (e.g., in a smart contract or transaction memo).
- Arweave + Terra: Similar to IPFS, you can store data on Arweave and link it via a smart contract.
3. Decentralized Storage Alternatives
If you need scalable, decentralized storage, consider:
- IPFS (InterPlanetary File System)
- Arweave (Permanent storage)
- Filecoin (Decentralized storage marketplace)
- Storj (Encrypted, decentralized storage)
Limitations of On-Chain Storage on Terra
- High Cost: Storing large amounts of data on-chain is expensive due to gas fees.
- Limited Scalability: Terra is not optimized for high-volume data storage like dedicated storage blockchains.
Conclusion
For small, structured data, use CosmWasm smart contracts. For large files, use IPFS/Arweave and reference them on-chain. If you need dedicated decentralized storage, consider alternatives like Filecoin or Storj.
Would you like help with a specific implementation (e.g., storing data in a Terra smart contract)?
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