Unlike traditional cryptocurrencies such as Bitcoin and Ethereum, which are very volatile, stablecoins that are pegged in international currencies like US dollars are very predictable. Terra is a stablecoin that has been gaining popularity recently because it is stable and its value can be predicted easily.
Unfortunately, many beginners in cryptocurrencies and other investments do not know the opportunities they have on Terra blockchain. If you have never heard of this, fret not. We will guide you on this and how it can benefit you.
What is Terra Blockchain?
This is a crypto project, more like a fintech, with an intention to power financial apps and startups in cryptocurrencies. Terra US, also known as UST, is a stablecoin that uses an algorithm and reserve token to peg itself to the US dollar. This is unlike Tether, which is pegged to USD using a cash and cash equivalent.
Terra blockchain was designed by Terraform Lab in South Korea and has shown significant growth and acceptance since its inception in 2018. Terra has helped many people to pay on e-commerce platforms using its coin. Therefore, the Terra blockchain works through partnering with cryptocurrencies and entrepreneurs all over the world.
But this is not all. Terra blockchain also allows users to earn tokens as they pay, trade, or save. And through partnering with many companies, Terra has become quite a success. Thus, there is an opportunity to grow your cryptocurrency investment as well. If you are just starting off in the world of cryptocurrencies, it is better that you know all of this information about Terra blockchain.
How Does Terra Blockchain Work?
- Earning on Terra blockchain – Terra has partnered with many platforms to allow users to earn as they make payments. For instance, Loop DEX is integrated with Terra blockchain where you can provide liquidity and start earning interest immediately. The good thing is that you earn immediately when someone trades, which means that earning is a guarantee. Isn’t it good to earn passive income on a secure platform? This is called yield farming.
- Making payment easy – According to the founders of Terra blockchain, Terra will be the next big thing in e-commerce payment platforms. Since it is a stablecoin, paying through Terra eliminates the volatility of cryptocurrencies. It can be easily balanced to suit popular cryptocurrencies such as Dogecoin and Bitcoin through an algorithm, making it very useful.
What Are the Challenges of Terra Blockchain?
Terra blockchain just started a few years ago and it is still improving. Hence, challenges are there and critics have a lot to say. Currently, Terra blockchain is active in South Korea where it was founded, and no one is quite sure whether it will gain acceptance in other countries across the world. However, the founders have been eyeing Asia where the use of cryptocurrency is most active.
The other challenge is that Terra blockchain is less decentralized than other stablecoins and cryptocurrencies such as Bitcoin and Ethereum. According to critics, this could put off some investors, but the founders have defended this, claiming that the reason is to make the transactions faster.
Final Word
Terra blockchain is expected to increase in popularity outside South Korea with time. By partnering with other companies such as Loop, the blockchain is expected to improve its services to become a leader in this approach.
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