(May 2022). Terra (LUNA) has solved the 3rd biggest use case in the decentralized trustless ledger technology (DLT).
https://tinyurl.com/peerstablecoin (shortcut to here)
[Aug 31. 2024: This doc was orig. written in May 2022. In Sept. LUNA/Terra collapsed from some $20 Billion in marketcap to few millions in few days. Seems like: “industry gods” bushwacked it and took it down earning billions w/o using ANY of their cash (its like the flash loans but instead of few seconds… the “block” is several days or even longer if the SEC passover such, as in, if a tree falls and SEC dont charge, has it fallen, just dont lose it! )… hitting LUNA when it was moving billions in liquidity from one account to another, and its open/available exchange liquidity was very thin enabling a few hundred millions in sell order to break the pegs, and crash it (aided by removal of supports and braces previously set up by “allies” for such purpose) by such as FTX and Allemeda (both have same officers) and … Three Arrows, Tron, and guided by ze-bullet-proofs with access to inside decisioning in LUNA /Terra (the industry is manned by young engineers where transparency is second only to cohorts solving/replicating any TradFi gaps in DeFi with math protocols, so a cautionary: seems transparency is vulnerable to a calculated manual intervention almost all the time; also heard: FTX rugpulled “our startup, and we were funded by them …”, so if predators in TradFi, then, in DeFi*) … However, the crypto industry must have/solve the nothing backed stablecoin …as now, there are 3 types: backed by USD/equivalents; backed by crypto assets (Maker, etc.); backed by “it-self” as was LUNA/Terra. This third is an absolute must to be solved. *There is a book here somewhere…i.e., “the untold story of billions harvested by banging-on/shaking the magical money machine trees built by ”…
If Bitcoin solved the store of value, and Ethereum solved the (smart) contracts or computation, Terra has solved the — store of value and use as locally and globally usable payment currency—and on its way to 6 degrees liquidity.
(Side) As a bonus: It may have solved for the first time, the “user experience” and the economics with its algorithmic seigniorage — for the direct conversion of human work and labor (especially in the underbanked real-world) to an understandable and usable form of decentralized money* in lieu of the local currency. For example, a user will pay for services in Terra which is stable and locally pegged and is increasingly usable at other local businesses. Paying in bitcoin or ethereum would not give the same understanding and usability. (*A seemingly impossible dream and vision quest which many have tried to solve.)
Terra is indefinitely scalable. This scalability is economically recursive and grows by users and businesses simply accepting it in lieu of fiat. As its volatility (speed of usages) increases, its “GDP” will increase.
Whereas Bitcoin and Ethereum also can scale by their acceptance in lieu of the fiat, Terra is different in that it is a daily use stable currency with orders of magnitude use cases and adoptability. Its smaller unit of account and stability has democratized crypto currency, or flattened the barriers.
A tipping point can be reached where it will become independent of its convertibility to fiat as increasing consumers and businesses will choose to keep Terra and not convert to the fiat. One reason is that it is — easy to handle and cheaper to use and well, it’s the people’s money. Not to mention the breakneck speed of innovation by the Terra team and its developer community infusing it with more features.
Terra only needs to continue to innovate new use cases and functions of Terra and a direction is to continue to specially modify and replicate selectively the traditional finance functions, services and uses. It needs to fit such to its ethos of democratized cryptocurrency. This fits the philosophy of the DLT and its (p2p) social purpose and empowering, its community building and sharing. This p2p democratized flattened cryptocurrency uses and ownership of the network is where its core Terra currency value creation lie.
In short: Terra solves the organic value creation to cryptocurrency, i.e., translating the network effect to money, in practice. Terra liquidity ATM is 1 to 2 degree removed vs. the USD which is full 6 degrees. Eventually, Terra will reach 6 degrees.
(Have: a “lending” project at Terra. Want: team. chungmojo(at))gmail)
04/27:
“Algorithmic stablecoins are fast becoming the norm — protocol-issued dollars coming to every blockchain,” Do Kwon, the founder of Terraform Labs, which created the crypto tokens LUNA and UST, said in a tweet on April 21. “Detractors cannot see — currencies are ultimately backed by the economies that use them, and the future is clearly opting to use decentralized and self-sovereign stablecoin.”
