If you have been interested in the cryptocurrency market, then you have heard about Terra (LUNA). If you do not know what this project is and how it became one of the top 10 largest cryptocurrencies in the market, don’t worry, we have created a guide for you.
In the next few sections, we will get into the details of what Terra (LUNA) is and how it is having a large impact on the crypto market. Moreover, we will tell you how this project is related to UST, one of the largest stablecoins in the crypto market.
What is Terra (LUNA)?
Terra (LUNA) is a cryptocurrency and blockchain project that focuses on the creation of different stablecoins. Stablecoins are virtual currencies that have their value pegged to a fiat currency. For example, a USD-pegged stablecoin will always be worth $1 or close to this value. Meanwhile, a EUR-pegged stablecoin will always be worth €1 or close to it.
Therefore, stablecoins are becoming increasingly popular in different decentralized finance (DeFi) and decentralized platforms in the market. Terra is one of the blockchain networks that it is making the expansion of the crypto industry possible and helping create a large number of stablecoins around the world.
Each of the coins that are created on the Terra network (stablecoins) can be converted into LUNA tokens. The goal of having LUNA tokens is to pay for network fees (as in every blockchain network) and have governance power in this blockchain protocol.
LUNA is also working as a way to stabilize the value of the stablecoins created on this network. Compared to other stablecoins in the market that have been backed by the real underlying asset (i.e. U.S. dollars or euros), the Terra network allows for the creation of stablecoins with a value that is programmable.
If the value of TerraUSD (UST) falls below $1, then, there is a supply reduction of UST (transformed into LUNA). This supply reduction makes it possible for the UST to come back to its previous price level of $1. If the price of UST moves above $1, the network will simply increase UST supply to push its value once again towards $1.
This is how LUNA and this blockchain network have been allowing for the creation of different stablecoins without having to be worried about the underlying asset affecting the price of this virtual currency. Thanks to the current growth that pushed LUNA higher, this virtual currency has reached the top 10.
Meanwhile, the UST cryptocurrency has also become one of the largest cryptocurrencies in the world. Indeed, it has almost surpassed Binance USD (BUSD) and reached the 14th place in the market. It is considered the fourth-largest stablecoin in the world behind Tether (USDT), USD Coin (USDC) and Binance Coin (BUSD).
It would be very interesting to see how the future of the market will evolve with this virtual currency in the coming months. It is also worth pointing out that this project became very popular in the Asian markets and it has expanded in different countries in the region. At the moment, there are different stablecoins that have been created on top of this blockchain network.
LUNA in the Cryptocurrency Market
Let’s now talk about LUNA in the cryptocurrency market and how this digital currency was able to reach the top 10. There are some things to take into consideration about it and how this project was able to become one of the largest in the world in such a short period of time.
The coin was released in 2019 and this is what CoinMarketCap shows on its website. From 2019 until early 2021, LUNA was almost a non-existent coin. The virtual currency had a value close to $0.20 most of the time. This shows that there was no interest and almost no volume for LUNA.
Now, in early 2021, when Bitcoin and other virtual currencies started to move higher, we saw that the coin bounced and registered massively large volumes. This represented a clear interest from the community and an influx of fresh funds entering the market. The coin moved from $0.295 to $1.43 between October 2020 and January 2021.
This allowed LUNA to start its first bull market that pushed the price of the coin to $22. This process took palace between January 2021 and March 2021. At the same time that LUNA was making new all-time highs, Bitcoin was suppressing everyone by breaking new all-time highs. Therefore, we see that LUNA followed the whole trend of the cryptocurrency market.
After reaching this price top, LUNA then entered an accumulation period that lasted until the end of May, when the cryptocurrency market plummeted. The coin moved from $22 to $16. This was the moment in May when the coin abruptly fell to just $4 per coin. At that time, many considered that a new bear market could start in the industry. However, this did not happen.
After hitting $4 per coin, LUNA was traded between $4 and $7 for some months (until mid-July 2021). At that time, the coin started moving higher once again. This has clearly had an impact on the long-term trend of LUNA. Since that moment, it is difficult to find a long-term period in which LUNA did not grow.
The coin has then been moving higher almost on a daily basis until reaching a top of $100 in late 2021 (November). This was also the moment in which Bitcoin hit an all-time high of $69,000 per coin. This shows that throughout the second half of 2021, LUNA experienced a very positive bull trend that allowed investors to make large profits.
There has been a small period of time between November 2021 and February 2022 in which the virtual currency fell by 50%. Nevertheless, the coin continued moving higher and a few days ago, LUNA reached an all-time high of over $107. This is how LUNA is now the 9th largest virtual currency in the market with a capitalization of $33 billion.
TerraUSD (UST) Explained
It is now time to talk about TerraUSD and how this stablecoin works. First of all, as mentioned before, UST or TerraUSD is a stablecoin that has its value pegged to the U.S. dollar. But there are different types of stablecoins depending on how the protocol that created them does to maintain the peg.
Usually, a stablecoin will require a financial institution or company to hold the fiat currencies necessary to back the price of the stablecoin. For example, if a stablecoin issues 1,000 tokens worth $1 each, this project should have $1,000 saved in a bank account (or similar) to back the value of the stablecoin.
While most cryptocurrency projects followed this approach, TerraUSD works in a different way. This is a decentralized stablecoin that runs on top of the Ethereum (ETH) blockchain and is considered to be an algorithmic stablecoin. The value is pegged 1-to-1 to the U.S. dollar but it does not have any type of backing more than the Terra network with the LUNA digital asset being used to create or burn UST tokens.
It is worth taking into consideration that UST works also on the Terra blockchain and it is currently used in order for users to get access to a wide range of decentralized finance (DeFi) protocols and traditional finance applications. The goal is to make it possible for investors to use this coin as a hedge against volatility in traditional financial and crypto markets while keeping a U.S. value at all times.
Thanks to the expansion of the Terra network over the last year, we have seen a massive growth of UST. Indeed, the coin was able to become one of the top 4 stablecoins in the market after USDT, USDC and BUSD. Therefore, this shows that there is a large demand for UST and that investors are using it all over the world to engage with different financial solutions.
The Terra and the LUNA ecosystems are interconnected. According to Terra’s official site, more demand for Terra stablecoins is equal to more value captured by LUNA, Terra’s decentralized reserve asset. Thanks to this growth, UST is now considered to be the largest decentralized algorithmic stablecoin in the market allowing for the creation of new solutions for users in the DeFi industry.
Where to buy LUNA and UST?
If you want to buy LUNA, you should know that this virtual currency is already available in a large number of cryptocurrency exchanges. This shows that there was a large demand for this virtual currency and that investors were searching for ways to get access to this coin and get exposure to this project.
Right now, Binance, KuCoin, Huobi Global and Bitfinex are some of the best platforms to buy LUNA. As usual, Binance is the cryptocurrency exchange offering the largest number of trading pairs for LUNA. This platform is letting investors trade LUNA/USDT, LUNA/BUSD, LUNA/BTC, LUNA/EUR, LUNA/ETH, LUNA/BNB, LUNA/UST, LUNA/AUD, LUNA/TRY, LUNA/BRL, LUNA/GBP and LUNA/BIDR. In this way, Binance is able to account for 23.45% of the total trading volume around the world of this virtual currency. This is massive just for one exchange. Moreover, Binance is also offering many other features for investors, including staking, a Launchpad and many other solutions.
Binance is usually one of the best platforms for investors that want to trade in the crypto market and get access to many other services and solutions related to digital currencies. Moreover, you can deposit funds on the Binance exchange using debit and credit cards in just seconds.
KuCoin, instead, has five different trading pairs for LUNA. These trading pairs include LUNA/USDT, LUNA/BTC, LUNA/ETH, LUNA/UST and LUNA/KCS. The trading volume for these five trading pairs is equal to 6.29% of the total trading volume for LUNA around the world.
KuCoin is a recognized cryptocurrency exchange that will let you deposit funds in many different ways. Moreover, it is also offering many trading pairs for investors. One of the positive things about KuCoin is that it also has large liquidity compared to other platforms.
Finally, Huobi Global is also one of the exchanges letting you trade LUNA. The company is offering four different trading pairs. These trading pairs include LUNA/USDT, LUNA/BTC, LUNA/HT and LUNA/UST. These account for 4.72% of the total trading volume around the world. As we can see, Binance is the leader in terms of trading volume and trading pairs when it comes to LUNA.
Now, when we talk about TerraUSD (UST), we see KuCoin having the largest volume for this virtual currency followed by Bitfinex, Huobi Global and then Binance. Binance, in this case, has only three different trading pairs: LUNA/UST, UST/BTC and ETH/UST. They account for 2.42% of all UST trading volume in the market.
Bitfinex, instead, has a massively large number of trading pairs that we would not be able to mention in this post. We are talking about 44 different trading pairs just on the Bitfinex platform. However, they account for close to 2.30% of the total trading volume for the UST virtual currency around the world.
How to buy LUNA and UST?
But how to buy LUNA and UST? As we mentioned before, the best way to do so is by using a cryptocurrency exchange account. The whole process is quite simple and this would let you get access to one of the fastest-growing virtual currencies in the world.
Step 1 – Create a Cryptocurrency Exchange Account
The first thing that you have to do to buy LUNA or UST is select a cryptocurrency exchange. We have shared with you the names of some of the most popular cryptocurrency exchanges offering trading solutions for LUNA and UST. It is up to you to decide which of them you use.
Once you have selected the cryptocurrency exchange, you will have to create an account. This process can take a few minutes and it might require you to pass a KYC verification.
Step 2 – Top Up Your Account
Now that you have a crypto exchange account, you have to deposit funds. This would let you purchase the coins that you want to buy. The deposit process should be quite easy and it only involves selecting the payment method and processing the transfer.
Step 3 – Buy LUNA or UST
After depositing funds, you can purchase UST or LUNA. You have to go to the exchange or trading platform and select the trading pair that you want to use to buy LUNA or UST. Once you have done that, you only need to confirm the transaction and the funds will be reflected in your account.