How to Invest in Terra UK – With Low Fees

Want to invest in Terra? Terra (LUNA) is a unique blockchain that uses stablecoins and its in-house token LUNA to offer fast and cheap retail transactions. Terra applications do good business in Asia and the price of LUNA rocketed in 2021 by 8,400%.

Throughout this beginner’s guide we’ll cover everything you need to know about how to invest in Terra as well as the best place to invest in cryptocurrencies with low fees. Read on as we investigate the ins and outs of trading Terra coin.

What is Terra (LUNA)?

Terra is a DeFi (Decentralised Finance) blockchain network. Terra’s coin LUNA is ranked #8 in terms of crypto market capitalisation ($48.8bn):

Top 10 Crypto by Market Cap

(Source: Tokenterminal, November 2021)

Terra hosts two types of digital currency which work in unison:

1. LUNA is Terra’s in-house staking and governance token. When people say ‘Invest in Terra’ they are usually referring to LUNA.
2. Terra also offers an expanding range of stablecoins pegged to fiat currencies: the US Dollar TerraUSD (UST), the British Pound (TerraGBP), the Japanese Yen (TerraJPY), the Euro (TerraEUR), the South Korean Won (TerraKRW), and the Mongolian Turik (TerraMNT).

LUNA is used in the Terra ecosystem to stabilise the price of Terra stablecoins.

Terra was founded in 2018 in South Korea by Do Kwon and Daniel Shim of Terraform labs. Terra’s aim is to support an end-to-end retail payment system.

In South Asia, the digital payment landscape is massively fragmented: there are roughly 50 digital payment systems in use including ApplePay, SamsungPay and Alipay. Neither retailers and customers are served by this confusion. Terra aims to provide a fast and cheap way of handling payments that now offers the key advantage of being compatible with other key blockchains.

In Mongolia, you can pay some taxi drivers using TerraMNT. Many other e-commerce applications of Terra’s stablecoins are in use, with 45 million customers and £25 billion USD in gross merchandise value. Terra’s customers and merchant partners use Terra’s wallet, Terra Station, to manage their supply of Terra stablecoins and staking coin LUNA.

How does the Terra system work?

The Terra system centres on the use of a number of stablecoins pegged to fiat currencies. Fiat currencies are conventional currencies issued by sovereign governments like the American Dollar (USD) and the Euro (EUR). Stablecoins are crypto which track precisely the value of fiat currencies. The aim of stablecoins is to offer a fair medium of exchange in the real world with the added convenience of digital operation.

Terra achieves the price stability of its stablecoins with an algorithmic system that motivates traders to engage in arbitrage between the stablecoins, on the one hand, and Terra crypto and staking token LUNA, on the other hand. The net result is profits for arbitrage traders, stabilisation of the stablecoins and an elastic supply of LUNA. LUNA is minted as part of the arbitrage process, but is also burnt as a deflationary measure.

Arbitrage is what happens when a trader takes advantage of the difference in price between two markets. If you are new to crypto, be reassured that you can trade Terra stablecoins or Terra crypto LUNA without engaging in arbitrage. In Terra’s system, you can – if you want – stake your LUNA with a validator who will use it in arbitrage and earn you rewards. But this is not compulsory.

What tech is Terra based on?

Terra uses Cosmos blockchain technology and the Tendermint Proof-of-Stake (PoS) validation system. Proof-of-Stake is much faster and more energy-efficient than the old system of Proof-of-Work used by Bitcoin, for example.

As a blockchain transaction system, Terra is cheaper and faster than Ethereum but cannot match Ethereum for global take-up. A good reason to invest in Terra tech is that it is designed to be compatible with the Ethereum and Binance Smart Chain blockchains via its web-based Terra Bridge service. Terra Bridge is based on CosmWasm smart contract tech.

Why Invest in Terra?

Terra Luna has a market cap of over $23B putting it in the number 13 position of the top cryptocurrencies across the board. According to coinmarketcap.com it’s currently trading for $61.46 with a daily trading volume of $2.3 billion. But with so many digital assets out there it’s hard to give a definitive answer to the question of should I invest in Terra Luna? 

One of the main reasons crypto-hungry investors are looking to buy Terra Luna is because it provides access to a level of stability that fiat currencies have. Terra Luna is trying to address the pressing issues and hurdles that most blockchain technologies are facing. Those obstacles include quick settlements and high volatility. Terra Luna offers a decentralized financial model that is pegged to a range of stablecoins.

Its goal is to maintain the stability of the stablecoins in its system. A stablecoin is a coin that, by definition, does not change significantly in real time. It employs its own technology to match supply and demand and to try to make its stablecoins stable using algorithms. If you consider how a Visa debit card operates, it enables cross-border transactions for cheap fees for retailers. You could then use the Terra Luna blockchain technology along with its native DeFi token to yield similar results. This could be applied in key industries such as e-commerce.

Terra Crypto Price

Price history to date

Terra raised $32 million from LUNA’s February 2018 ICO. Institutional investors included Huobi, OKEx and Biance. LUNA was launched onto exchanges in July 2019 at a price of $1.31.

The price of LUNA then fell and, until the beginning of 2021, the Terra crypto price rarely rose over a dollar. Then, over the course of 2021, the price of LUNA rose by a staggering 8400%:

• On January 1st, 2021, the price of LUNA was $0.65.
• With the crypto boom of 2021, the price of LUNA rose to hit almost $35 by the end of August.
• The subsequent crypto crash saw the price fall to $25.3 on 7th September.
• On 30th September, Terra introduced its Columbus-5 mainnet upgrade. This meant Terra could now interact with other blockchains. The move also introduced the burning of LUNA as a deflationary procedure.
• As a result, on December 1st, 2021, the price of LUNA hit an all-time-high of $59.63.

Current price

On December 1st, 2021, the Terra crypto price (LUNA) is $57.32.

Terra Coin Price Prediction

The long-term Terra price prediction is excellent. Technical chartists predict that, by 2026, a $100 investment in LUNA right now (which would buy you just over 2 LUNA) could be worth almost $700. That is a 5-year price increase of almost 600%.

2022 Terra Price Prediction

Some market analysts predict that LUNA will continue rising in price to reach $118 by the end of 2022. More conservative analysts are slightly less bullish, with a Terra price prediction of almost $80 for 2022.

2023-2025 Terra Price Prediction

By 2025, the price of LUNA is expected by some analysts to reach $139. The bulls’ argument is that blockchain payment systems will become the norm, and Terra – as one of the top blockchains – is well-placed to leverage its existing business in Asia and continue to grow.

Conclusion

If you want to invest in Terra (LUNA), you have a good nose for DeFi crypto. Terra, as a developing blockchain with plenty of active applications in the real world, has a bright future. When it comes to investing in crypto.

Frequently Asked Questions on Terra