Project Review — LUNA to the Moon?

I enjoying reading about new developments to find projects that will continue to push the blockchain space forward. After researching many platform coins, I came across a very interesting project called Terra ($LUNA). What caught my attention about this project was the tokenomics which led me to further look into the ecosystem. In this article I will share the overview as to why I find LUNA to be one of the most interesting projects in today’s market.

What is Luna

LUNA is a decentralized financial infrstructure platform with the ability to run multiple chains, connected by the Cosmos IBC. The focus is to make their stablecoins available to every developer on every blockchain. Through Anchor Protocol, Terra stable coins can earn high yields without having to participate in the high volitility of cryptocurrencies. The Mirror Protocol allows the creation of real world assets such as stocks and commodities on the blockchain.

This project can be seen as the onramp into the blockchain world using the stable coins for spending or saving, this is the new era of banking. What I like most about LUNA is that it allows people to utilize blockchain technology in ways that we have yet to see, not on speculation, but pure utility.

When it comes to spending Terra stable coins, there are 3 main sources — PayWithTerra, CHAI, and MemePay. The three platforms alone have generated over 2M active users and $1B+ transaction volume per year. For a project that came onto the scene post 2017 bull run, it has gained the attention of many investors in the cryptocurrency space currently sitting at a $5.5B market cap (#28).

Tokenomics

Terra Luna is built to depreciate upon growth of the ecosystem. The value of LUNA ends up being the amount of the entire ecosystem since there will be an equal value burned for every token minted. For example, if $1 UST is minted, $1 worth of LUNA will be burned and as the ecosystem grows, the supply of LUNA will decrease, and increasing demand for this coin. The easiest way to understand the tokenomics is to watch the below video:

Why now?

I decided to open a position in LUNA not only due to the tokenomics but because of it’s utility. LUNA is the leading blockchain project in South Korea which is one of the biggest cryptocurrency friendly countries in the world. LUNA has partnerships with countries and companies all across Asia and the pace of development is something to keep an eye on.

LUNA is soon to interconnect with large ecosystems like ETH, BSC, ATOM, and SOL. The current numbers are amazing but once the stable coins like TerraUSD (UST) and other native currencies are accessible through multiple ecosystems, the price of LUNA should soar. Why use UST over other stables like USDT or USDC? Well through the Anchor Protocol, you can earn 20% APY on your coin. So not only do you have a pegged USD (or native currency like KRW), but it also pays around 2000x more than what a traditional bank, with much faster settlement times and lower cost to the user.

Solana, one of the fastest growing ecosystems this year will also soon be building a wormhole into the Terra ecosystem. Out of all projects, they decided to bridge with Terra second to ETH? Yes, that is because there is real value in this ecosystem and they understand the utility and benefits behind the project.

Cosmos, one of the leaders in interoperability is also launching the Gravity DEX which will allow for cross chain trading between projects like ATOM, BNB, LUNA, and CRO. Connecting the dots, I see this as a big opportunity for LUNA as it will have the ability to interconnect between the SOL ecosystem which is linked to ETH and the Cosmos ecosystem. This will give LUNA access to around 25% of the overall blockchain space or $440B.

Closing Statements

In summary, I wanted to share the main reasons as to why I decided to invest in Terra’s development. The coin price has been sideways for about 2 months and I believe the next big run is right around the corner. When researching, I look for projects that have a moat or barrier to entry, and I believe it is clear that LUNA meets that qualification.

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Disclaimer:

NO INVESTMENT ADVICE — The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

Current Holdings: $SOL $ATOM $LUNA $RAY $ICX $BALN