Should You Invest in TerraUSD?

Are you interested in buying TerraUSD? Learn what TerraUSD is, who the founders are, and what makes it unique so you can decide whether or not to invest in this stablecoin.


  • UST
    TerraUSD
  • Price
    $ 0.059881
  • Change
    23.44%
  • Marketcap
    $ 687.21 M
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TerraUSD (priced at $1.00) is one of the most popular stablecoins available. However, does this mean it’s a good investment?

Most cryptocurrency investors should understand how this coin works. Cryptocurrency investors and traders usually buy TerraUSD or other stablecoins to manage their entries and exits out of different markets.

So, should you buy UST? Is it worth the investment?  In short, TerraUSD can be a good investment under the right circumstances. 

A stablecoin is almost essential if you want to sell a cryptocurrency without fully divesting it into the U.S. dollar. It allows you to keep your money in a crypto wallet instead of incurring the time and fees associated with exchanging it back into fiat currency.

TerraUSD is also worth investing in when you anticipate a crypto bear market. You can sell positions in another crypto, hold the sale value in UST, and buy back in when you expect higher prices again.

UST allows you to exit and enter the crypto market without the hassle of divesting back into fiat currency. This coin makes investing and trading crypto more streamlined and cost-effective.

In addition, some crypto experts argue that UST is more secure than stablecoins backed by the U.S. dollar.  UST is backed by LUNA, its governance token, giving the coin potentially infinite scalability.

LUNA backing also allows the currency to stay pegged to the U.S. dollar more easily.

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What is TerraUSD (UST)?

TerraUSD (UST) resides on the Terra blockchain.  It is a stablecoin, meaning its price is pegged 1:1 to the U.S. dollar. The price fluctuates slightly above or below $1.

However, it is almost always within a few points of the U.S. dollar.  TerraUSD is decentralized. Decentralized coins allow users to transact without a third party overlooking the transaction.

Banks must be third parties whenever people transact with fiat currency.  So who or what governs UST?  TerraUSD is backed by LUNA, another cryptocurrency on the identical blockchain.

LUNA acts as a governance token for USD, where holders of LUNA can vote on changes to the stablecoin.  In addition, UST allows different blockchain ecosystems to link to one another using a bridging protocol called Dropship.

This enables TerraUSD to integrate with DeFi platforms and Decentralized Exchanges (DEXs) and move between different blockchains.

Who Are The Founders of TerraUSD?

Do Kwon and Daniel Shin founded TerraUSD on September 12, 2020. The coin launched on Bittrex Global, a popular crypto exchange founded in 2014. 

Terraform Labs is the company behind TerraUSD, led by Do Kwon as its CEO.  Before becoming CEO, Kwon was a software engineer for Microsoft and Apple.

He made it on Forbes’ 30 Under 30 list of people influencing how money flowed in Asia’s economy in 2019.  Daniel Shin was the founder and CEO of Ticketmonster, Korea’s top e-commerce platform. 

With a degree in economics from the Wharton School of the University of Pennsylvania and a wealth of experience in e-commerce, Daniel co-founded Terraform Labs with Do Kwon to take on the fintech space.

How Many TerraUSD (UST) Coins Are in Circulation?

According to CoinMarketCap, 18.59 billion TerraUSD coins are currently in circulation.  The network burns $1 worth of LUNA for every 1 UST minted to mine a UST coin.

LUNA is the reserve asset.  In contrast, other stablecoins with the U.S. dollar as their reserve asset are limited by the number of dollars available.

This allows TerraUSD to be infinitely scalable, solving a significant hurdle to broad DeFi advancement and adoption.

How is TerraUSD Secured?

Smart-contract algorithms secure TerraUSD on the Terra blockchain. Its reserve asset, LUNA, also secures it.  The Terra blockchain generates a transaction fee when a holder purchases with UST.

This fee is then distributed among LUNA holders who have chosen to put their LUNA in a staking pool. The staking pool serves to help secure the network.

The Terra network is also secured by decentralized validators who use a delegated proof-of-stake consensus. In compensation, the validators receive rewards, participate in the network consensus, and have voting power in proportion to how much LUNA they have staked.

Ultimately, the 130 validators with the most LUNA tokens staked secure the Terra network and TerraUSD.

What Makes TerraUSD Unique?

TerraUSD’s most unique feature is that it is not backed by fiat currency, like other stablecoins.  Other stablecoins, like USDT, are required by law to have reserve assets equal to the number of coins available for purchase.

In other words, they need to have $1 available for each currency in circulation.  However, TerraUSD is backed by Terra’s governance token, LUNA.

To mint one TerraUSD, holders must burn one dollar’s worth of LUNA.  TerraUSD is an algorithmic stablecoin that offers scalability that most other stablecoins can’t compete with.

It's algorithmic nature is also intended to provide price stability over the long term.

TerraUSD Alternatives

bitcoinBitcoin
$ 28,889.004.47%
ethereumEthereum
$ 1,930.044.13%
tetherTether
$ 1.000.07%
usd-coinUSD Coin
$ 1.000.02%
bnbBNB
$ 297.112.83%
xrpXRP
$ 0.4042443.69%
binance-usdBinance USD
$ 1.000.07%
cardanoCardano
$ 0.5056254.96%
solanaSolana
$ 48.578.13%
dogecoinDogecoin
$ 0.0834633.68%

Should I Invest in TerraUSD?

TerraUSD is a yield-bearing coin that can offer 20% returns via their Anchor protocol.  A 20% return on any asset is worth considering if you believe in the longevity of that asset.

This way, investing in UST can also be a buy-and-hold strategy requiring little maintenance from the investor.  Overall, TerraUSD is a proven stablecoin that has consistently risen since its launch in 2020. 

Backed by a governance token instead of fiat currency, UST can scale at a rate other stablecoins can’t keep up with. Its governance token also helps create price stability and maintain its peg to the U.S. dollar.

The coin can also be used across different blockchains using its bridging protocol. This capability further expands the applications for UST in DeFi apps and protocols.

TerraUSD is worth investing in, as it has solved many of the critical shortcomings of other popular stablecoins. UST is positioned to have increased utility as the blockchain, and DeFi space continues to develop.

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