The crypto market is highly optimistic about Decentralized Finance (DeFi) as it is one of the most promising sectors, offering greater yield opportunities for users. Most of the use in DeFi comes from stablecoins, coins that are pegged 1:1 to another asset, usually the US dollar.
Unfortunately, several large stablecoins are centralized and are problematic for users. However, Terra (LUNA) is a stable coin that has been stealing the spotlight by solving the issues of centralized coins. That is why crypto experts believe that Terra will skyrocket. Let’s find out more.
Thanks to its fast adoption rate, the LUNA coin increased almost 500% in less than a month, from August to September 2021. According to analysts, Terra’s rise reflects the market’s growing demand for higher scalability. So what are the contributing factors behind Terra’s claim to fame as one of the high potential cryptos to buy right now? Let us take you through them one by one.
Why To Invest In Terra
The new upgrades to the Terra network would continue to spike the price of LUNA, making it a good investment now.
Terra is basically a protocol for creating cryptocurrencies with stable prices. The stable coin aims to reduce the volatility that cryptocurrencies like Bitcoin experience. Unlike other coins, Terra is an algorithmic stable coin that powers the blockchain payments network. The crypto has pushed its adoption rate through several e-commerce alliances, including Asia-Pacific giants such as TMON, Baemin, Carousell, Qoo10, and Tiki.
The native token of the network, LUNA, has significantly grown in price and value over the past few months as the project has garnered massive popularity. Terra also acts as a catalyst in completely removing the issues concerning token mining and promotes transparency. Therefore, LUNA is more like a programmable asset that addresses speed, scalability, and accessibility problems.
What Is Unique About Terra?
Terra’s unique mechanism has been a key factor in boosting its adoption rate, skyrocketing LUNA to new heights.
Terra stands apart from the crowd through the use of its fiat-pegged stablecoins. It does this by combining the borderless benefits of cryptocurrencies with the day-to-day price stability of fiat currencies. Terra maintains the one-to-one peg by using an algorithm that automatically adjusts stablecoin supply based on its demand. The mechanism also involves incentivizing LUNA holders to swap LUNA and stablecoins at profitable exchange rates, as required, to either extend or limit the stable coin supply to match the demand.
Moreover, the Terra platform provides a variety of stablecoin alternatives that offer an immediate settlement. The mechanism also helps Terra offer its users cheaper fees, seamless cross-border exchanges, increased stability, and more responsive financial assets.
The development team behind the crypto prioritized the creation of a completely transparent environment. The network was thus created from scratch to solve the complex payments value chain by employing a single blockchain layer to eliminate or reduce the need for credit card networks, banks, and payment gateways.
Is Terra (LUNA) Going To Skyrocket In 2022?
With a significant rally over the past months, Terra is one of the best-performing cryptocurrencies in the market today.
On August 1, 2021, LUNA was priced at less than $12. But September has been even luckier for the coin as it followed a bullish pattern, and the price surged to an all-time high of $44.34 on September 11. LUNA then increased this to $103.33 on December 27th.
LUNA is necessary for the stability of Terra’s stablecoins. Token holders can compensate for absorbing volatility by staking the coin. In addition, the Terra payment network would also pay those token holders a portion of transaction fees. This will eventually boost the adoption of LUNA tokens.
Terraform Labs is also working on various other initiatives like the Anchor Protocol, a high-yield savings account for LUNA holders. Yet another feature is the Mirror Protocol, built on the Terra blockchain to generate synthetic financial assets. As more applications and use cases for Terra arise, the demand for the token will eventually increase, making LUNA a good buy now.
Factors That Skyrocket Price of LUNA To New Heights
With several updates and coalitions in the pipeline, LUNA is going to skyrocket to new heights in 2022.
Here are a few significant factors that make Terra one of the top cryptocurrencies to buy this year.
The Coinbase Effect
One significant reason that bolstered the price of LUNA is thanks to Coinbase. The US-based crypto exchange has listed Wrapped Luna (WLUNA), an ERC-20 token designed to track LUNA’s value, and TerraUSD (UST), a decentralized stablecoin that is powered by LUNA.
Although these cryptocurrencies are not entirely related to Terra, this helped in driving awareness and popularity among investors worldwide.
The Launch Of Columbus-5
Furthermore, the anticipation for the upcoming upgrade, Columbus-5, has shot up the popularity of this stablecoin. Once launched, the upgrade will allow more applications to be built on the network and will also create more financial incentives for stakers. Apart from that, the burning of LUNA transaction fees is a significant feature that is stirring up excitement among almost all users. This will eventually reduce the total supply of LUNA, pushing its demand and value higher. Moreover, this will allow even more interoperability with top blockchains, promoting the influence of UST.
The Anchor Protocol
The Anchor protocol, or the “Gold Standard for Passive Income on the Blockchain,” was launched on March 17, 2021. This savings and lending protocol allows users to deposit stablecoins simultaneously to earn interest on them.
The launch of Anchor has also pushed up the total value locked in Anchor to nearly $2.2 billion from $1.7 billion within just three days. This growth reflected in the TVL of Anchor exposes the demand for UST. Moreover, as demand for UST increases, more LUNA tokens will be burned, and eventually, the price of Terra will skyrocket.
Partnership With Mobile Payment App CHAI
Terra has gained more popularity in Korea than in any other country. The Korean-based app CHAI is the first mobile payments app to use the Terra network. It is a platform that enables anyone with a bank account to process payments using blockchain technology. Terra’s partnership with the app CHAI was aimed to offer service to the growing eCommerce market.
Since its launch in June 2021, CHAI has already reached almost 500,000 users and has facilitated over $54 million worth of transactions using the Terra blockchain in the first four months of operation.
Why Terra Will Skyrocket: Expert Predictions
Critics believe that Terra will continue to skyrocket in 2022, positioning itself as a viable competitor to Ethereum.
Almost all analysts and experts say that Terra has a bright future ahead. Here are some of the most noteworthy expert predictions for the LUNA token.
“Based on our forecasts, a long-term increase is expected; the price prognosis for 2027 is $752.43. With a 5-year investment, the revenue is expected to be around +1,334.57%.”
Digital Coin Price
“It seems Terra prices might record considerable growth this year. The price of LUNA/USD may trade around $68.71 by the end of 2022 and $96.1 by 2025.”
“The platform revised its forecast. They expect the Terra price is going to reach a decent price level of $67.95 by the end of 2022. The website predicts that Terra’s price will hover at an average price of $82.29 for the year 2023. “
Check Out: Is Terra Worth Investing?
Should You Invest $1,000 In LUNA Right Now?
The Terra cryptocurrency has plenty of room for growth, making this the right time to buy LUNA.
With its advanced technology and decentralization, Terra is an excellent option for the digital economy. The network is also known for its low-cost programmable payments and transaction costs. Moreover, the infrastructure is designed for the easy development of decentralized applications (dApps) and stablecoins.
Terra aims to make its user’s lives easy and leaves a significant footprint on the technological and functional eco-space. As a result, Terra is one of the biggest moneymakers in the crypto space today.
Moreover, Terraform Labs, which manages the Terra cryptocurrency project, announced that investors like Arrington Capital, Lightspeed Venture Partners, and Pantera Capital had pledged $150 million to help it nurture various crypto projects, making this the best time to invest in LUNA.
Terra has brought a dramatic change in the conventional payment stack on the blockchain, replacing it with a decentralized financial payment network. There is no doubt that Terra will skyrocket in 2022. Therefore, it is one of the top cryptocurrency projects with promising potential and can be a solid investment.
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