Terra price: ​This top token has surged 15,000% in one year. Does it have more steam left?

Synopsis

On a year-to-date basis, the token has surged about 12,000 per cent, the data from Coinmarketcap suggested. For perspective, if you had invested Rs 10,000 in the token on January 1, the value of your investment would be Rs 12,00,000 today.

Market experts are bullish on Terra as it holds more value due to the use case of the blockchain, which is interpretable and also incentivises the users for using the blockchain.

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New Delhi: Following the recent mayhem in the digital token market, Terra has made its way into the list of top 10 cryptocurrencies on the basis of market capitalisation.

It now has a market capitalisation close to $26 billion, more than that of Dogecoin, Shiba Inu, Avalanche, Polygon and Crypto.com Coin. It could overpower Polkadot, which has a market cap of nearly $29 billion.

Terra has been one of the best performing cryptocurrencies in 2021. The digital token has rallied more than 15,000 per cent in the last one year. It hit an all-time high of $75.56 from less than half a dollar a year ago.
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On a year-to-date basis, the token has surged about 12,000 per cent, the data from Coinmarketcap suggested. For perspective, if you had invested Rs 10,000 in the token on January 1, the value of your investment would be Rs 12,00,000 today.

The token was trading in the range of $68-70 on Wednesday morning. There are 382,692,629.13 Luna tokens in supply so far, with a total supply at 855,799,933.

Supernatural returns in the cryptocurrency market is not a new fad. The eye-popping returns have been a prime factor that lured risk-bearers to invest in these tokens. Some of the tokens have popped up and disappeared in a jiffy. But, experts say, there are tokens that are good for long-term bets primarily because they are backed by robust fundamentals, and Terra falls in that category.

Terra is the fifth largest decentralized finance (DeFi) protocol with a total value locked at over $12.7 billion. It is building a network of fiat money-pegged algorithmic stable coins that can power the next generation of payment networks.

Hitesh Malviya, founder, itsblockchain.com, said Terra has managed to build an impressive ecosystem of DeFi projects around it, creating a strong utility for its native token, LUNA. “Terra UST is an algorithmic stable coin driving a lot of demand for LUNA,” he added. “A couple of NFT projects have also been launched on the ecosystem lately, overall the price surge is backed by solid developments and fundamentals.”

Holders of Terra can stake their tokens to earn rewards and use it to vote on governance proposals for the ecosystem. LUNA has a dynamic supply of 1 billion coins.

Raj A Kapoor, founder, India Blockchain Alliance, said that Terra was a trustless, programmable blockchain ecommerce platform that offered fiat pegged stablecoins to provide more stability when conducting cross-border payments. “Crypto is all about perception and creating a buzz or chatter, and there’s a lot of attention on the Terra ecosystem,” Kapoor added. “After a recent network upgrade, Terra is now following in the footsteps of other blockchains like Solana and Avalanche.”

People are incentivised for using Terra blockchain while maintaining an algorithmic stable token called UST which is pegged at $1. This blockchain is targeted to be a mass payment processing platform where fees are capped at 1 per cent. Terra offers instant settlement and low-cost remittance. Two of the main DeFi protocols based on Terra are anchor and mirror protocols. Anchor offers yield staking services, and mirror offers synthetic asset creation and usage.

Terra is also an interoperable blockchain that can interact with many different blockchains, said Vikas Ahuja, CEO of CrossTower India. “Terra is minted and distributed to users using the terra blockchain, namely Mars Protocol, Prism Protocol and Staderlabs.”

There are many Luna use cases, especially for the UST, that range from payments to savings to investing. As a result, Luna’s price dynamics are mostly a function of the demand for UST.

Ahuja of CrossTower India said Terra was a high-value utility token. “Any blockchain with utility will have a bright future,” he added.

Market experts are bullish on Terra as it holds more value due to the use case of the blockchain, which is interpretable and also incentivises the users for using the blockchain.

Terra’s community DAO passed a proposal to burn 88 millions of LUNA supplies in the next few days, which would have a deflationary effect on the token. The price could keep rising in the next couple of days, said Malviya, and the token would hit $100 soon.

Terra is also working toward becoming the leading e-commerce stablecoin payment and DeFi service provider in the world. “The long-term investment opportunity in this coin, even at current prices, seems profitable,” said Kapoor of India Blockchain Alliance, adding that investors should at the same time be cautious of volatility in the short term.

(Disclaimer: Cryptocurrencies are an unregulated asset class. The trading of Bitcoins and other cryptocurrencies are highly volatile. Trading in them may not be suitable for all people. Anyone wishing to invest should seek his or her own independent financial or professional advice. ETmarkets does not promote trading in cryptocurrnecies.)
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Updated: 12/08/2021 — 16:00