This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
Terra, with its token LUNA (CRYPTO: LUNA), has the 9th largest market cap at $30 billion. Yet, you may have never heard of it, and you wouldn't be alone. Terra's popularity and growth mostly come from the Asia-Pacific region of the world.
Terra is attempting to build a currency of stable coins, backed by real and digital assets. In 2022 the currency is finally hitting critical mass and activity.
Surging Activity
The number of wallet addresses on the network has been surging since the end of 2021, from about 900,000 to 3.5 million wallets. This has caused a massive uptick in the buying, selling, and spending of the currency, which increases both its value and utility.
The LUNA token may be about to go through the mass-market popularity that many alt coins enjoyed in 2021, thanks to its recent introduction to the U.S. market. Being an Asia-Pacific focused company, the U.S. has not been the primary focus. But already it has 220,000 stakers across the globe, who provide a stable network ready to handle growth.
Built to Grow
Terra already has proven utility, instead of just frothy theoretical value, as many hyped alt coins tend to do. The LUNA blockchain has proven it can handle high transaction volume and the steady number of stakers shows a stable and long-term belief in LUNA. The network has been integrated into apps as a payment platform. It has been built to be faster and cheaper to run than ETH (with 10,000 transactions per second speed compared to 20 on ETH). It has DeFi, staking, and other financial tools already running.
Terra is ready to handle the increased activity on its blockchain. Currently, it handles a 24-hour volume of about $3.1 billion. Compare that to ADA $900 Million, SOL $1.5 billion, and XRP $1.9 billion. Even with this trading volume, the chain is still processing less transactions per second than the 10,000 limit. Current estimates from Terra is 4,000-7,000 transactions per second. Terra has shown it can handle high volume, and is able to handle more.
Terra is trying to be a global currency and money mover, and is succeeding in getting there (with a long way to go still). It could become the cheapest and most efficient way to move currencies globally.
Also noteworthy: Terra recently added $3 billion in bitcoin to back their currency (with a goal of adding up to $10 billion). This is a great sign that the currency is growing and its developers are putting as much support as possible behind it.
Terra wants its stable coins to be based on the Bitcoin monetary standard and will allow Terra to build a stable coin that is actually decentralized. This is a very unique and complex way of doing stable coins which is traditionally based on a 1 to 1 relationship with a central repository.
In a traditional stable coin the cryptocurrency is backed by a traditional bank account. Where 1 token is backed by $1 real dollar in a bank account. Terra is backing its stable coin with assets on the blockchain. There is no central traditional bank holding all the value.
Terra is using crypto investments in LUNA to decentralize the assets backing up the stable coins.
2022 and Beyond
Terra has laid the groundwork to have a bright future. LUNA may be one of the best performing alt coins in 2022 and beyond.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
