What is Terra (blockchain) design of terra and history of terra
Terra (Blockchain) & its History
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What is Terra(blockchain) design of terra and history of terra
Terra isa blockchain protocoland payment platform used for algorithmic stablecoins. The project was createdin 2018 by Terraform Labs, a startup co-founded by Do Kwon and Daniel Shin. Itis most known for its Terra stablecoin and the associated Luna reserveasset cryptocurrency.
In May 2022,the Terra blockchain was temporarily halted after the collapse of thestablecoin TerraUSD (UST) and Luna, in an event that wiped out almost$45 billion in market capitalisation within a week.
DESIGN
Terra is ablockchain that leverages fiat-pegged stablecoins to power a payment system.For consensus the Terra blockchain uses a proof-of-stake codesign. Severalstablecoins are built atop the Terra protocol, including TerraUSD, whichwas the third largest stablecoin by market capitalisation before its collapsein May 2022.The Terra blockchain has a fully functional ecosystem of Dapps suchas Anchor and Mirror which has utilised the stable-coin infrastructure of Terra.
Terra is agroup of algorithmic stablecoins, named according to the currencies towhich they are pegged—for example, TerraUSD (UST) is pegged to the U.S.dollar. Luna serves as the primary backing asset for Terra, and is also used asa governance token for users to vote on Terra community proposals. USTstablecoins were not backed by U.S. dollars; instead, it was designed tomaintain its peg through a complex model called a "burn and mintequilibrium". This method uses a two-token system, whereby one token issupposed to remain stable (UST) while the other token (LUNA) is meant to absorbvolatility.
The AnchorProtocol was a lending and borrowing protocol built on the Terra chain.Investors who deposited UST in the Anchor Protocol were receiving a 19.45%yield that was paid out from Terra's reserves. Due to such a high-yieldingmechanism of the Anchor Protocol, some critics raised concerns that Kwon'sstablecoin model could function like a "ginormous Ponzi scheme".Mirror Protocol was another project based on the Terra chain, which designedand offered financial derivatives that virtually "mirrored"actual listed stocks.[
In 2018, DoKwon and Daniel Shin (also known as Shin Hyun-sung) co-founded TerraformLabs in Seoul, South Korea. In 2019, Terraform Labs launched its first cryptocurrencytoken. Terraform Labs raised more than $200 million from investment firmssuch as Arrington Capital, Coinbase Ventures, Galaxy Digital and LightspeedVenture Partners.
HISTORY
In January2022, the Luna Foundation Guard (LFG) was established as a non-profit based inSingapore, with Do Kwon serving as its director. Terraform Labs allocated aportion of the money obtained from UST sales to Luna Foundation Guard, to beused as reserves to stabilise the price of UST. As of 7 May, just before USTbroke its peg, LFG held reserves of 80,394 bitcoin worth approximately $2.4billion. Bitcoin was the largest portion of the reserve assets, though LFG alsoheld reserves in various other stablecoins and cryptocurrencies.
In February2022, Terra and the Washington Nationals Major League Baseball team announcedthey had entered into a sponsorship agreement which provided stadium andtelevision branding, as well as the rebranding of the Washington Nationals cluband lounge to the "Terra Club".
The deal wasoriginally proposed to the Terra community by Kwon, referring only to anunnamed "sports franchise in one of the four major American professionalsports leagues", and the community agreed to pay $38.15 million for afive-year-long exclusive partnership.
The foundersKwon and Shin each owned one share of Terraform Labs, giving each founder 50%of controlling power. Kwon later enlarged his stock pool to eleven shares,giving him approximately 91.7% ownership and Shin the remaining 8.3%. Shin andChai Corporation, a Terra-ecosystem payment service company that he founded,announced on 18 May 2022 that Shin no longer held any ownership stock inTerraform Labs.
However,after it was revealed from sources of the Singaporean Account and CorporateRegulatory Authority that Shin still held 8.3% of Terraform Labs ownership, ChaiCorporation announced that Shin was not able to "finish liquidating hisremaining ownership in time" despite having the same share of ownership asof 18 May. The documents from the Singaporean authority also revealed that asof 18 May, Shin held 51.2% of ownership and Kwon 22.4% of Chai Holdings, theparent company of Chai Corporation.
Terra(blockchain protocol), Terra Design, Payment Platform used for Stablecoins, Most Known for its Terra Stablecoins, Terra Chain.