What happened
LUNA (LUNA 1.98%) coins were up 12.6% over 24 hours to $48.01 apiece at 8:54 a.m. EDT. After its much-anticipated Columbus-5 upgrade on Sept. 30, the Terra Luna network has emerged to become one of the most competitive blockchain scaling solutions (Layer 1) designed to increase the number of transactions and improve the functionality of programmable agreements (smart contracts). After the update, there's been a notable uptick in activity on Terra Bridge, which enables users to send or receive assets across different blockchains.
So what
The Columbus-5 upgrade made the following protocol changes to the Terra Luna network:
- Added deflationary pressure to LUNA coins
- Integrated the Terra Luna ecosystem with Cosmos' Stargate protocol, enabling the transfer of digital assets across multiple blockchains
- Increased the yield of validating transactions on the network by pledging LUNA coins (staking)
These technological advancements have fueled investor demand, causing LUNA to reach a market cap of $19 billion.
Image source: Getty Images.
Now what
But Terra has yet to reach its full potential. Its network's "crown jewel" isn't LUNA coins but TerraUSD (UST 3.55%). UST is a stablecoin with a 1:1 exchange ratio with the U.S. dollar. But unlike many other stablecoins, it's not backed by fiat currencies but by LUNA. So investors earn rewards by using LUNA to fix UST's exchange rate with USD.
This simultaneously enables capital appreciation from LUNA coins and the stability of transactions using UST, satisfying the needs of both investors and consumers. With increased blockchain integrations, pretty soon, consumers will be able to transact UST on the Solana and Ethereum networks and more. Definitely keep an eye out for the promising coin LUNA.
