The original Terra LUNA coin left behind following the recent UST/Luna collapse and the formation of a new Terra chain is known as LUNA Classic (LUNC). Kwon's recovery strategy includes the establishment of a completely new chain on which future transactions would be handled. The previous chain was divided into the LUNA Classic and Terra chains. Terra will be the name of the new chain (known as LUNA 2.0), while LUNA Classic (LUNC) is the native coin of the original Terra LUNA blockchain. The previous Terra protocol was updated to allow stablecoin developers to construct Terra decentralized finance (DeFi) initiatives. Terra and LUNA were the two cryptocurrencies used in the project. Terra was a stablecoin standard that was linked to fiat and other currencies.

Terra (LUNA), the network's native cryptocurrency, served as a staking and governance asset. Users stake LUNA to get access to government, become validators, and receive incentives. Users may also use LUNA to create Terra's UST token or a token related to their local currency. It is crucial to remember, however, that while these stablecoins are linked to the value of cash, they are not backed by fiat. The LUNA token, on the other hand, was regarded as an algorithmic stablecoin.

LUNA Classic and LUNA 2.0 are not the same, despite their remarkable likeness. According to the new governance structure, the Terra network has been separated into two chains. The previous chain will be Terra Classic with Luna Classic tokens (LUNC), whereas Terra with LUNA tokens will be the new chain named LUNA 2.0.

History

Do Kwon and Daniel Shin established Terra in 2018 and debuted its mainnet in 2019. Kwon and Shin created Terra to provide consumers with the stability of fiat currencies while using the power of blockchain technology for faster and cheaper settlements than traditional payment options. Additionally, the two creators thought that such possibilities would enhance blockchain acceptance. Terra has the support of the Terra Alliance. The Terra Alliance is a global coalition of e-commerce companies and platforms lobbying for Terra adoption. The Terra Alliance enterprises have a combined value of tens of billions of dollars and over 45 million clients.

How does it work

A conventional proof-of-stake (PoS) consensus process is employed to validate transactions on the Terra 2.0 cryptocurrency network. At any given time, 130 validators are engaged in network consensus, with voting privileges defined by the number of LUNA 2.0 linked to each node. Gas costs and a 7% annual LUNA 2.0 inflation rate are utilized to generate incentives. LUNA 2.0 token holders engage in consensus by delegating LUNA 2.0 tokens to a validator of their choosing. Validators, like delegates, regularly put their personal money on the line. In this method, the validation node maintains a commission before providing incentives to delegators.

The incentives produced by Terra 2.0 currency delegators change based on the validators' voting power. However, individuals with more voting power automatically receive more incentives, which must be distributed across a larger pool of delegators. Delegating can be done using the Terra Station interface, but it comes with a risk. Validators, for example, can be fined for misbehaving, leading in staked LUNA 2.0 being cut. Slashing can occur even if the validators are accidentally switched off for a short period of time.

Total supply and circulation

Total supply is 6,90 trillion coins, while circulating supply is 6,58 trillion coins.