Terra blockchain has been around for quite some time, but the general public heard about them this year when the price of LUNA skyrocketed. What’s the story behind this? Read through the article to find out more about the token issuance model and how Ramp fits into this picture!
Let’s start with the basics: what is Terra blockchain?
Terra is a smart contract-enabled blockchain running on top of Cosmos’s SDK, CosmWasm. POS, good developer UX and large network of partnering applications. Pretty typical for the new generation blockchains, isn’t it? But what truly makes this project special is the mechanisms they’ve enabled for creating stablecoins.
A family of stablecoins
UST, the flagship stablecoin issued by Terraform Labs, is not technically collateralised, yet it value follows USD quite accurately. How does this work? To understand this, we must meet LUNA, the native coin of the Terra blockchain.
Supply and demand affect the price of UST. If it goes above $1, LUNA coin holders sell their LUNA for UST to increase the supply and keep the peg. If it falls below $1, it can be sold for LUNA. This structure keeps the peg close to $1 and provides interesting opportunities for arbitrage for the community members. This way LUNA helps to stabilize the stablecoins on Terra and incentivize usage if needed.
The same model can be applied to other national currencies - Euros, Pounds or Korean Wons. And judging from their actions so far, this is the direction that the Terraform labs is taking.
Where does Ramp fit in?
We’re happy to announce that both LUNA and UST are now available for purchase in Ramp SDK!
You can use debit or credit card, ApplePay, OpenBanking or SEPA transfers to quickly get them delivered to your wallet, and all at best rates - starting at 0.49%. Here's where you can try it!
And as usual - builders, we present you the one SDK to rule them all - and let your users buy UST and LUNA in minutes.
Do you want to build on Terra with us? Check out the docs and schedule a call with our Partnerships Team below!
Join the innovators who have integrated Ramp! Schedule a call with our Sales Team:
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