Luna is the reserve currency of the Terra platform.
Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems. According to its white paper, Terra combines the price stability and wide adoption of fiat currencies with the censorship-resistance of Bitcoin (BTC) and offers fast and affordable settlements. Development on Terra began in January 2018, and its mainnet officially launched in April 2019. As of September 2021, it offers stablecoins pegged to the U.S. dollar, South Korean won, Mongolian tugrik and the International Monetary Fund’s Special Drawing Rights basket of currencies — and it intends to roll out additional options. This has led to an increase in LUNA price.
LUNA and Stability
Terra seeks to set itself apart through its use of fiat-pegged stablecoins, stating that it combines the borderless benefits of cryptocurrencies with the day-to-day price stability of fiat currencies. It keeps its one-to-one peg through an algorithm that automatically adjusts stablecoin supply based on its demand. It does so by incentivizing LUNA holders to swap LUNA and stablecoins at profitable exchange rates, as needed, to either expand or contract the stablecoin supply to match demand.
Terra has established a number of partnerships with payments platforms, particularly in the Asia-Pacific region. In July 2019, Terra announced a partnership with Chai, a South Korea-based mobile payments application. Purchases made using Chai on e-commerce platforms are processed via the Terra blockchain network. Each transaction is subject to (on average) a 2%–3% fee charged to the merchant. Terra is supported by the Terra Alliance, a group of businesses and platforms advocating for the adoption of Terra. In February 2019, the company announced that e-commerce platforms from 10 different countries, representing a user base of 45 million and a gross merchandise value of $25 billion, were members of the alliance.
Let us review LUNA Price.
LUNA Price Prediction
LUNA is currently trading just above the support zone at $42.25. If it can stay above this zone, we could start seeing a move towards $47.53, $54.25, $73.67 and $105.09. Failure to hold the support at $42.25 could lead to a drop towards $38.55 and $33.16.
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