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#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
> $80 million dollars (100 billion won) of the company’s funds every month were sent to different wallets for the operating expense. Did he send them in the form of KRT? They are now worthless, just like UST.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
#Terra Pro-Arguments Below is an argument written by ramjithunder24 which won 1st place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Disclosure: I do not own any Terra (Luna), neither am I affiliated with them. > > **Intro** > > Terra is a blockchain protocol that uses stablecoins in order to facilitate payments systems. > > Terra aims to utilise the price stability of fiat currencies and Bitcoin's decentralised characteristic for faster and affordable payments. > > **Terra's Defi Ecosystem** > > According to [DeFi Llama](https://defillama.com/chains), Terra's Defi ecosystem is the second-largest Defi protocol in terms of Total Value Locked (TVL), making it a prominent Defi protocol in the crowded Defi landscape. For investors that have Defi as one of their top-priority checkboxes when investing in coins, this itself should give investors a lot of confidence in Terra (LUNA). > > Moreover, Terra has bridges to many other prominent crypto chains such as ATOM, DOT and ETH. In other words, Terra provides many different alternatives / a wide range of choices for its Defi services. > > **LUNA's Deflationary Status** > > With the [Columbus-5 upgrade](https://coinmarketcap.com/alexandria/article/columbus-5-is-almost-here-what-does-that-mean-for-terra-and-its-users-flipside-crypto) in September 2021, LUNA burned to mint UST will be "actually burned", as opposed to being sent to the community pool (which was what was done previously). This is designed to increase the value of the currency, provide more incentive to for LUNA holders to stake, and to make LUNA deflationary in the long run. > > **Terra's Stablecoins** > > Terra's stablecoins are a key part of their ecosystem and their overall goals and values. As stated in the intro, Terra wants to use the advantages of fiat and crypto to create better payment mechanisms. And this is where their stablecoins come in. > > Currently, the most popular stablecoins under the Terra ecosystem are UST (pegged to the US Dollar), SDT (pegged to the IMF's Special Drawing Rights basket of currencies), and KRT (pegged to the South Korean Won). > > These are algorithmic stablecoins in which the stablecoin's supply is adjusted according to it's demand. To be more specific,[1 UST can be exchanged for $1 USD's worth of LUNA (Terra's native coin) at any time.](https://angelprotocol.medium.com/how-does-ust-work-ec7b2f6e2c2c) Hence, if the UST becomes worth less than $1 USD, buyers will quickly buy it and swap it for the $1 USD worth of LUNA, hence making a profit. This creates demand for UST and enables its price to recorrect itself to $1 USD. Additionally, for every new UST that is produced, $1 USD worth of LUNA is burnt. > > This is different from the approach that USDT (Tether) or USDC have taken for their stablecoins -which was to back the stablecoins with a fiat currency. And Terra has received criticsm about their approach and has started buying Bitcoin (BTC) to back their stablecoins. In fact, Terraform Lab's (the company behind Terra) founder -Do Kwon- announced a paln to [buy and hold $10 Billion worth of Bitcoin](https://twitter.com/stablekwon/status/1503296630396645376) to back it's stablecoins. > > [“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset,”Kwon said in an interview with Bloomberg previously this month.](https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin#:~:text=Terra's%20purchases%20are%20partly%20in,Luna%20tokens%2C%20Terra's%20native%20cryptocurrency) (Yes, this hyperlinked section is copy-paste, but it's from an interview and is directly quoted, so it doesn't break any rules. > > But how are the stablecoins related to LUNA? Well, one can argue that the LUNA token and UST are somewhat dependent on each other. In fact, the LUNA token will "succeed" if UST remains stable. > > **Response to Criticisms of Terra** > > One of the most common criticisms of Terra is that it is **not decentralised enough**. Assuming that [LunaRichList](https://lunarichlist.com/) is somewhat (by somewhat, I mean maybe not up to the decimal places - also, the site says its only for experimental purposes) correct, Terraform Labs holds a significant portion of the total LUNA coin supply. Hence, it is an undeniable truth that at the moment, LUNA seems pretty centralised. > > However, earlier this year, Terraform Labs donated a large amount of LUNA to [lfg.org](https://lfg.org), further lowering their stake in the supply of LUNA. If Terraform labs had malicious intents, they would not have done this. In fact, TFL regularly donates LUNA to LFG, which is a seperate entity and is run by experts in the crypto industry. Additionally, operating a [Terra node](https://docs.terra.money/docs/full-node/run-a-full-terra-node/system-config.html) is much less resource-intensive than running a [Solana node](https://docs.solana.com/running-validator/validator-reqs), making it more decentralisable. I understand that this is not a full, complete counterargument to Terra's centralisation issue, but it is meant to provide a clarification on why Terra is most likely not a rugpull. Lastly, Terraform Labs has a kind of [kill-switch](https://twitter.com/lunafomo/status/1440461303932338179) in which Terraform Labs will be completely separated from LUNA and the Terra network, enabling the final step to full decentralisation. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
Pretty sure KRT is based on Korean won, and PHT Philippine peso.
UST is pegged to the USD. AUT is pegged to the Aus dollar. KRT for German dollar, PHT for Vietnam etc. You can buy all these and more on Terra
The point of LUNA is to provide a means of stabilising TerraStablecoins. Terra being decentralised means that there will always be demand for it. You have a money market such as Anchor which regardless of what it is paying provides depositors an appreciating UST asset. You can create synthetic assets on Mirror. You also have Chai and Kado pay (+ others) which allows for individuals to purchase real world items using TerraStables (eg. UST, KRT etc). These systems create constant demand for Terra and provide a demand base level. Demand on Terrastables results in burning of LUNA. By staking LUNA you get the fees of transactions on the network. Imagine if Chai goes global, the daily volume would be very high which means more fees for stakers. LUNA is in a growth phase thus why the incentives are unsustainable but it is definitely not a ponzi. I believe it needs a strong pull back to flush out the hype speculators but what’s lefts is a fundamentally sound system.
>It shows how interests are paid from Luna staking in its vast majority. Without it youd be left with.. aave. This is correct, the incentives for the borrowers right now are through ANC tokens, which will dry up. And when it does, more borrowers will likely leave and the demand to borrow will dry up. Which means borrower interest rates also go down. If not enough of the borrowers can meet the current lending rates, then of course, the deposit rates will also go down to a more sustainable yield. This has been the design of Anchor since the very beginning. ​ >And this staking income is only possible because of luna demand... That comes from people depositing into anchor. This thing is going to be a disaster. "Luna demand", "staking", and "depositing into Anchor" have absolutely no correlation with each other. You can deposit into Anchor, get yields, without touching a single LUNA, or ANC for that matter. Whether it's still the current 19.5% rate or lower in the next couple years is a different story, which was outlined above. Luna staking income, on the other hand, comes from seigniorage, swap fees, and tobin tax in the stablecoin family of Terra, including KRT, etc. The high staking reward by the way are locked in for the next year or 2 or so due to community fund burn to propel Ozone. Finally, Luna demand is dependent on its utility, how attractive it is to hold (just like any other asset), and just a straight bet if UST really catches on.
Finally someone bringing up CHAI and other apps using the Terra Blockchain in mainstream cases. Chai itself has over 2 million regular monthly users. These users use the be app to transact with merchants setup on the payment rails, getting discounts cashback etc. The fees paid by the merchants, paid in Luna, UST, KRT, SDR, etc are paid out to stakers. Therefore people who want stable cash flow from a crypto holding are incentivized to stack Luna as a means of acquiring passive income.
Terra is the 2nd blockchain in terms of highest TVL, FYI. That's value locked in actual DeFi, not just the seigniorage from the mint-burn mechanism. I think the primary problem you have is that you think the ONLY purpose of LUNA and UST is to arbitrage each other in isolation. That's the IRON-TITAN model and if you have coins with practically no use outside of its own eco, then it dies a horrible death. ​ LUNA and UST works in DeFi as well as any other coin, while UST is miles ahead of any other crypto in terms of upcoming real-world adoption and using your crypto to actual saving + spending (Kash, Kado, Alice, Outlet Finance, Astral Money, Tiiik, Beema). In fact, Terra's first dapp, Chai, is a payment solution using its stablecoin, KRT, pegged to the Korean Won. To mint KRT, you'd need to also burn LUNA.
Look into Chai and the other services in South Korea that run on the Terra Blockchain. Chai is a payment processing app used monthly by a cutie million South Koreans, so pretty much PayPal or Venmo. The payments are processed on Terra using their native Korean Won stable KRT. This means transactions cost pennies versus the 2-3% charged by a payment processor like Visa or MasterCard. The merchant then passes some of these savings onto their consumers with special discounts and cashback rewards. All of this runs on a legitimate Blockchain, but the front end users would have no idea they were using the tech if they weren't told.
It is worth noting that, when claiming staking rewards on LUNA's Terra Station, not all rewards will be in LUNA or UST. For example, I am now the proud HODLer of 119 $KRT (Korean Won), 0.00038 $EUT (Euro), and my personal favourite, 0.000025 $CAT (Canadian Dollar). So you might say I am a bit of a crypto forex trader now.
Terra ecosystem has a ton of stable coins including EUT (euro) and KRT (Korean won).
LOL Luna's first stablecoin was KRT, pegged to the South Korean Won. It is actually used in Korea. "A payments platform known as ‘Chai’ is allowing around 2.2 million users to transact the Korean Won stablecoin (KRT) with thousands of merchants, including Nike Korea. Most of the consumers would not even know they’re using blockchain technology, nor do they need to know. " [https://www.asiamarkets.com/south-korean-crypto-project-achieving-adoption/](https://www.asiamarkets.com/south-korean-crypto-project-achieving-adoption/)
https://www.asiamarkets.com/south-korean-crypto-project-achieving-adoption/ “Who is using Terra Luna? A payments platform known as ‘Chai’ is allowing around 2.2 million users to transact the Korean Won stablecoin (KRT) with thousands of merchants, including Nike Korea. Most of the consumers would not even know they’re using blockchain technology, nor do they need to know. Billionaire Mike Novogratz, an investor in Luna, says it was Terra’s proven use case that drew him to the project. “What’s great about Terra is they are one of the first sandbox experiments that’s getting outside of the sandbox,” Novogratz told Bloomberg.” GG
I think Chai (payment system built on luna and the KRT stablecoin pegged to Korean Wan) is used heavily in South Korea
UST, EUT, KRT and other Terra algo-based stablecoins is the best option, by far. Limitless ability to grow, and truly decentralized, so far less risk of government regulation. No claim of any fiat backing. Simple, clean, and less risky…save for the death spiral risk, but with Chai real life use and continued growth that should soon be next to impossible. Trading government overreach for technical risks here. Net it’s a win. USDC or anything fiat backed has more inherent risks, not just of default but of regulation, frozen funds, and a lot more.
There are. For example the on the Terra blockchain exist completely decentralized stablecoins. USD->UST EUR->EUT Japanese YEN -> JPT Korean Won -> KRT Thai Bath -> THT etc.
Yes this is why I invested in Luna. It has the advantage of being more capital efficient, more decentralized and also censorship resistant. Not only that Terra is trying to actually replace traditional banking. You can trade synthetic stocks (Mirror protocol), Fixed rate savings (Anchor protocol with 20% APY on UST) and also actual crypto spending (currently KRT which is a stablecoin for the Korean Won is being used in the Chai app has a Million Downloads on the play store metamask has 5 for perspective). And there are more protocols building things like variable rate and fixed rate borrowing (Mars protocol), Insurance for smart contracts (Ozone), ETF's (Nebula), Leverage trading (Lavana) and a crazy one called Prism (this one is hard to explain but awesome for DeFi) which are all launching in like a few months. this is why I love the Terra ecosystem as it's actually trying to replace banks rather than doing stuff no one cares like the 100th clone of Uniswap and all of these protocols are going to be interoperable.
Terra Luna and all of its decentralized algorithmic stablecoins pegged to several fiat-based stablecoins: UST, GBT, AUT, EUT, KRT, etc). A slew of dApps are being deployed on the Terra ecosystem which will further incentivize the use of Luna to keep the peg of its stablecoins. It's a challenge to summarize all of it. But if you want to go down this rabbit hole here's a good primer : https://research.thetie.io/the-terra-triforce-rise-of-the-lunatics/
interesting I was looking on both CoinGecko and Coinmarketcap both are only showing UST and KRT that is why I thought only Korean and US stablecoins.
Does KRT also burn LUNA supply or is it only when people mint UST?
May not be the exact faucet (as you asked) but staking Luna on Terra wallet (Terra Station) is benefited, beside more Luna from staking, with air drops of other coins like KRT, UST, ect. It's really worth looking.
There are over 10 stablecoins on Terra all pegged to various currencies around the world: UST - US Dollar CHT - Swiss franc (CHR) EUT - Euro KRT - Korean won (KRW) JPT - Japanese yen INT - Indian rupee (INR)