Is Terra (LUNA) A Good Investment?

Last Updated February 1st 2022
15 Min Read

The cryptocurrency scene is still bubbling, against the predictions of naysayers. Though the market is still considered volatile and many coins have lost value in recent times, the market is still making people rich. It is all about recognizing the right coin to back and knowing when to HODle and when to sell. 

There are several coins making waves at the moment but we are going to focus on Terra. If you are considering investing in Terra, it is critical that you study the coin properly before investing your money. 

It is understandable that many investors do not have the time or technical know-how to analyse a cryptocurrency before investing. That is one of the reasons many lose their money on the market. It is also the major reason we are here to help. 

We have done the bulk of the research you will need to do to understand whether Terra is a good investment. We will present the information you need in a clear manner to help you make the right decision. However, we are not going to offer any direct investment advice here. Therefore, it is essential that you read this post carefully to understand Terra and determine whether it is a good buy for your portfolio. 

Content 

Terra: What Exactly Is It? 

Terra is a blockchain project and a decentralized global payment solution that focuses on transferring stablecoins as a means of bringing stability to the volatile cryptocurrency market. As a blockchain protocol, Terra utilizes a handful of fiat-pegged stablecoins to power a stable global payment system. 

While Terra seeks to bring stability to the market and has several stablecoins tied to its network, it cannot be called a stablecoin per se. Terra is not like any other stablecoin platform out there. It is a unique platform that has introduced entirely new concepts to the cryptocurrency market. 

One of the unique concepts is the use of four different stablecoins and a volatile native currency to power a stable system. The native currency is known as Luna while the stablecoins include TerraUSD (UST), pegged against the US dollar, TerraKRW (KRT), pegged against the South Korean won, TerraMNT, pegged against the Mongolian tugrik, and TerraSDR (SDT), pegged against the IMF’s SDR basket of currencies. 

Terra has been able to create a robust infrastructure that supports fast and affordable settlements. According to Terra’s official whitepaper, the project seeks to combine the price stability and wide adoption of fiat currencies with the censorship-resistance of Bitcoin

Terra has grown to become one of the most programmable cryptocurrencies on the market. It leverages on a native token that is not a stablecoin, a stablecoin protocol, smart contracts, anchor protocol, mirror protocol, and more. Terra is now a big part of DeFi. The infrastructure is designed to make the creation of decentralized applications and stablecoin development easier. 

As hinted already, Terra has a native currency called Luna. This is a regular and volatile cryptocurrency that you can buy and sell. This native currency is the governance token of the platform and powers other activities within the network. There are also four stablecoins that work on the Terra platform, and there are plans to add more. 

Who Invented Terra And How Was It Created? 

Terra was co-founded by Daniel Shin and Do Kwon in January 2018. The project was conceived as a way to facilitate the rapid adoption of cryptocurrency by focusing on price stability and usability. The two major primary actors started by establishing the Terraform Labs in South Korea, from where the cryptocurrency was eventually launched. 

Before starting Terra, Shin and Kwon had had successful careers. Daniel Shin had previously co-founded Ticket Monster (TMON), a South Korean e-commerce platform that he also headed. He also founded a startup incubator called Fast Asia, which worked with several entrepreneurs to establish and grow fully functional companies and businesses. 

Kwon, on the other hand, previously founded and headed Anyfi, a South Korean startup that focused on providing decentralized wireless mesh networking solutions, He had also worked for two tech giants, Microsoft and Apple, as a software engineer. 

Kwon assumed the position of CEO of Terraform Labs and still occupies the position. The Labs started working on the project in January 2018, but the mainnet was eventually launched in April 2019. Terra is an evolving ecosystem as Terraform Labs continues to roll out updates and features that improve the network and drives it towards its many ambitions. 

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Does Terra Solve Any Problem? 

As an ambitious decentralized global payment solution, Terra was created to solve the problem of volatility in the market. However, instead of creating a single stablecoin, Terra introduced an entirely new concept that utilizes different protocols to solve the problem of volatility and more. 

In addition to solving the problem of volatility, Terra solves several problems that plague stablecoins. It reduces centralization in the market. It runs an open financial infrastructure that eliminates most technical limitations of stablecoins and related assets. 

Unlike regular stablecoins, Terra’s protocol functions across multiple blockchains. It offers high-level interoperability. While the blockchain was built on Cosmos and utilizes Tendermint technology, Terra is also live on Ethereum and Solana. There are plans to expand to other high-performance blockchains in the near future. 

Terra also solves the problem of speed. Transaction time on the Terra network is a lot faster than what is obtainable in Ethereum and other top blockchains. The network is also loved for its low fees. It makes sending money faster and cheaper, which is a recipe for success. 

Terra is also poised to become a truly borderless bank. Some time ago, the network introduced the Anchor Protocol, which allows stablecoin holders to earn rewards by staking their coins. In fact, Terra allows users to save their stablecoins, stake their stablecoins, and even obtain a loan, using liquid-staked PoS assets as collateral. It is possible to earn passive income from the network without necessarily selling your assets.  

What You Need To Know About the Terra Token (Luna) 

The native token of Terra is not a stablecoin. It is a normal cryptocurrency that is simply called Luna. It is the governance token of the network and serves several important purposes in the network. It is primarily used as the collateralizing mechanism to secure the price stability of the stablecoins. It is also an important element when it comes to staking of the stablecoins as it is used to lock value. 

Luna provides liquidity to the Terra ecosystem. It is used to pay transaction fees and also provides arbitrage opportunities for users. It also plays a critical role in the smart contract's rebalancing algorithms. Luna can also be staked on the platform, and rewards are paid out in Luna. 

Luna is the primary digital asset in Terr. It is the asset most people buy when they want to invest in Terra. Unlike the stablecoins in the network that are pegged against fiat currencies, Luna is volatile. That means the price changes regularly. The volatile nature of Luna is one of the reasons people can make or lose money buying and selling the asset. 

At the time of writing this piece, Luna was trading at $52.17 per token. In the past 24-hour period, it had reached a low of $49.35 and a high of $53.99. The trading volume in the same 24-hour period was $2,583,609,878. 

For a coin that was launched a few years ago, Luna has an impressive market capitalization of $20.95 billion. This makes it the 9th ranked cryptocurrency in the world by market capitalization.

The fully diluted market capitalization, however, is $42.6 billion. There is currently 400,872,746.77 Luna in circulation. That's approximately 40% of the proposed total supply of 1 billion Luna. 

Is Terra (LUNA) A Good Investment? 

Terra (LUNA) is honestly one of the most innovative cryptocurrency projects out there. It handles the problem of volatility in a unique way that does not undermine the very principles that promote profit-making in the cryptocurrency universe. But does that really make Terra a good investment? 

To an extent, we may say that Terra will be a good investment. The project solves key problems in a creative manner. It is also a very ambitious project. Already, many of its key goals have been achieved. New features are constantly being added, making the ecosystem a lot more vibrant and welcoming. 

Though there are many wonderful things about Terra, there are a few things that can make you reconsider investing in the cryptocurrency. Like other coins, Luna is volatile, and that means the chances of losing money can be as high as the chances of making profits. Terra is also a relatively new project and the native currency has a long way to go before becoming a mainstream digital currency. 

There is always an element of risks in cryptocurrency investments. The most important thing is to determine if the benefits of investing outweigh the risks of making a financial commitment. Even when an investment option appears to be very risky, some risk-loving actors can make a big move and get a massive reward. 

Check Out: Is Terra Worth Investing?

Pros and Cons of Investing In Terra

One of the easiest ways to determine whether an investment opportunity is worth it or not is to look at the cons and pros of making the investment. Here, we will highlight the pros and cons of investing in Terra, giving you an opportunity to weigh your next move properly: 

Pros of Terra (LUNA):

Investing in Terra is a viable foray into the fast-growing and rewarding DeFi sector

Investing in Terra allows you to bank on different stablecoins pegged against different fiat currencies and this makes payments for goods and services easier. 

Transacting on Terra is faster and more affordable, improving your chances of making profits. 

Investing in Terra opens an opportunity to save in stablecoins and earn interest. 

Terra allows investors to earn passive income by staking their digital coins. 

There are several different ways to earn from Terra than merely buying and selling the native token. 

Terra is a safe and reliable platform, meaning your investment is secure at all times. 

Terra offers short-term loan facilities to investors who can use their liquid assets as collateral. 

Terra will bring some level of stability to your cryptocurrency portfolio, allowing you to complete different investing activities without the problem of volatility. 

Terra operates a community-based governance mechanism, which means investors have the power to determine how the network is run. 

Cons of (LUNA): 

❌ Luna, the native token and primary investment vehicle of Terra, has shown signs of extreme volatility. The implication is that the chances of losing money are as high as the chances of making profits. 

❌ Terra is a relatively new cryptocurrency and quite difficult to predict. 

Terra has a long way before it catches up with top platforms like Ethereum

❌ Many governments are planning to launch central band digital currencies (CBDCs) and they will minimize the need for stablecoins, which is what Terra focuses on. 

❌ Terra is an ambitious project that is fast becoming a borderless bank – the nature of the platform will attract the attention of regulators. 

Is This A Good Time To Buy Terra (Luna)? 

Less than two years ago, Terra Luna was trading for less than $1 per token. In December 2021 Luna reached an all-time high of $103.33. If you invested two years ago, your investment will be worth a lot now. But then, is this also a good time to buy Terra Luna? 

Well, there is a good chance that Luna will gain value in the future as the Terra ecosystem grows bigger. But no one can authoritatively state that the native currency will be worth a lot more in the near future. There’s a lot of uncertainty surrounding the future of stablecoins and any major crackdown will affect Terra in some ways. 

It is possible that you can invest in Terra today and earn a reasonable profit in months or years to come. The price of the coin is still reasonable. The best thing about Terra is that it offers different ways for investors to earn. This can be a good time to make a move, but it is all down to your attitude to risks.  

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What Does The Future Hold For Terra? 

At the moment, Terra is looking pretty good. It is a remarkable cryptocurrency that boasts of a great future, especially when you consider the problems it solves. Terra is also a very ambitious platform that has made moves that have impressed several industry insiders. There is a good chance that it will grow further and attract many more users. The native currency is likely to gain more value in the future, also. 

It is also important to state here that Terra can be a target of regulatory bodies and federal governments in the near future. It is already tied to a number of fiat currencies with plans to add more. There are chances that some regulators will come after the coin, and that brings some level of uncertainty to its future. The next five years can be great, but no one can tell for sure what will happen in the next ten years. 

Read Also: Why Terra (LUNA) Is Going To Explode

Can Investing In Terra Make You Rich? 

Investing in a good cryptocurrency can make you rich. Terra is a good cryptocurrency by all standards. Terra, as a platform, has attracted several users. Luna, the native currency, has also performed really well on the market. 

People who invested in Terra in the early days have seen their investments grow significantly. It is still possible for new investors to make reasonable money by investing in Terra. After all, there are several ways to earn from Terra investments. 

Your chances of becoming rich by investing in Terra will be determined by a number of critical factors. How much you invest, your investment strategy, as well as your attitude to risks will all play a part. It is really necessary that you invest cautiously. 

How Does Terra Rank Among Good Cryptocurrency Investments? 

Another way to determine whether investing in a cryptocurrency is a good idea is to consider how the token/coin ranks among other good cryptocurrency investment options. In the case of Terra, we can say that it ranks really well in the league of good crypto investments

There are several criteria we can use to rate cryptocurrency investment options, including liquidity, market capitalization, and price. Luna has surpassed most cryptos that were launched years before the idea of Terra was conceived. Also, considering that Terra offers investors different ways to earn, it has all the qualities of a good investment vehicle. 

Again, it is important to note that Terra and Luna have their shortcomings. Terra is yet to reach the levels of Ethereum and similar blockchains in the DeFi sector. Luna has also shown signs of extreme volatility. However, anyone who understands the cryptocurrency market will rank Terra high among the best cryptocurrency investment for now. 

Should You Invest In Terra (LUNA) Now? 

If you are confident that Terra will fit properly in your investment portfolio then this can be a good time to invest in the LUNA coin. The price of the token is still reasonable, considering what it can become in the future. 

Though this is a good time to start investing in Terra, you need to be sure that you are ready for it. You shouldn’t enter the market without a strategy or a good plan. Make sure you understand what you are doing and the next moves you will make, depending on how the market reacts tomorrow. 

Don't Miss: Terra Price Prediction: Will Tera Rise In Value?

How Do You Invest In Terra? 

The commonest way for a regular cryptocurrency trader or investor to get involved in Terra is to buy the native currency, Luna. There are several activities on the platform that can bring you earnings, but you have to start by buying Luna. 

Buying cryptocurrencies like Luna is pretty simple. There are three categories of platforms where you can buy digital currencies, including cryptocurrency exchanges, brokerage companies, and mobile and web applications that are not official exchanges or brokerages but deal with cryptocurrencies. 

Depending on your online trading experience, you may have an investment platform where you can buy a cryptocurrency. If you don’t currently have one, then eToro may be the best for you. eToro is a full-service brokerage that is well-recognized as one of the best social trading platforms. Luna is available on eToro. The platform has several other cryptocurrencies. You can also buy stocks, bonds, and other investment vehicles from the brokerage. 

Final Words 

Terra is a unique cryptocurrency with a robust infrastructure to drive growth within its network and compatible blockchains. It brings stability to the market, hosting four stablecoins pegged against different fiat currencies. Terra also has a native currency that powers the network, serves as a governance token, and also serves as the primary investment vehicle. 

Terra is an ambitious cryptocurrency platform. It has also performed really well, considering that its blockchain is one of the biggest moneymakers in the cryptocurrency scene. 

Terra can be considered a good investment for various reasons. In addition to having an excellent blockchain, Terra offers fast transactions and very low fees. It has also launched some interesting protocols that make using the network and investing in it a lot more exciting and rewarding. 

You can save your digital assets on the platform, you can stake your tokens and earn passive income, and you can even obtain a short-term loan from the platform. It is fast transforming into a borderless bank, earning a good reputation in the fast-growing DeFi sector. 

From all we've covered so far, we believe you may want to invest in Terra. You should know, however, that cryptocurrency investment is generally risky. Terra also has its bad sides, which we've discussed already. 

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