Triaconta Weekly #176

The following topics will be addressed in this weekly.

  • Bundle performance
  • Winners & Losers
  • Market overview
  • What is Terra (LUNA)

Bundle performance
The entire crypto market is already entering its third green week and luckily the coins newly added during the revision are no exception. Top 30 and DeFi addition PancakeSwap (+20%) and Penny Stock addition Celer Network (+24%) have been very satisfying so far.

Big 3:
1 Month: +18.38% | 7D: +9.29% | 24H: +5.53%

Top 30:
1 Month: +12.80% | 7D: +16.66% | 24H: +5.01%

1 Month: +21.96% | 7D : +22.53% | 24H: +7.82%

1 Month: +11.69% | 7D: +24.33% | 24H: +4.73%

Winners & Losers
Gold for Terra (+44%) and silver and bronze for Lisk (+41%) and Ravencoin (+37%). Reserve Rights (+34%) and Polkadot (+29%) just missed the podium. Decred (-3%) is a small loser this week.

Market overview
Ethereum (ETH) successfully completed the London hard fork upgrade last Thursday and the Ethereum price is clearly benefiting from these improvements. From Thursday, transaction costs will no longer be paid to the miners but destroyed. As a direct result, Ethereum will automatically become a little bit more expensive with every use. In the meantime, almost 5000 Ethereum or more than 10 million euros has been burned since Thursday. The goal also seems to have been achieved because the transaction costs have certainly become a lot less.

Cardano (ADA) has finally been approved for trading on Japanese crypto exchanges and this is big news. As it is not easy for cryptocurrencies to gain regulatory approval in Japan, so far only a relatively small number of cryptocurrencies have been approved in Japan (e.g. Bitcoin, Bitcoin Cash, Ethereum, XRP, Litecoin, Basic Attention Token, Stellar, NEM, Tezos and Polkadot).

Bosch, a German manufacturing and technology company, has announced that it will use a decentralized machine learning network built by (FET) to predict potential failures in production machines. The Collective Learning Network allows the various manufacturers using Bosch equipment to share information with each other without actually sharing the raw data, greatly improving their ability to predict outages without affecting individual participants (competitors! ) have to trust each other.

What is Terra (LUNA)
We pay for more goods and services online than ever, but cryptocurrencies are still not widely used for that purpose. Terra finances projects that increase the adoption of crypto payments and expand the possibilities. The Terra US dollar (UST) can be used for borrowing, lending, saving and even synthetic stock trading. It is now mainly used in South Korea, but has been gaining attention in Japan, Europe, and both North and South America.

Very few stores want to be paid in a currency that can drop by 20% the next day or even the next hour. Would you like it if your income fluctuates enormously because your salary is the same amount of one cryptocurrency every month? We don’t think so. According to Terraform Labs, adoption and widespread use of a cryptocurrency is only possible if the cryptocurrency has a stable price relative to the existing fiat money. It is very difficult to realize this stability in a decentralized way and that is why there are now many central solutions like USDT and USDC. The Terra protocol uses an elastic monetary policy to create stable coins linked to the various fiat currencies. And that appears to really work as a decentralized solution.

How does it work?
The price of the Terra dollar is determined by supply and demand, both of which can move in any direction. The market will determine the demand for UST, the supply is determined by providing financial incentives to Luna token holders that can influence the supply. If customers can do more with Terra dollar, such as paying in stores or buying digital assets, demand will rise and the price of UST will rise. Without the Luna token, the coin would quickly rise above $1. At that point, a Luna holder can exchange one dollar in Luna for one UST (which is worth more than one dollar at the time) and make a bit of arbitrage profit in doing so. The supply of UST is increased by the exchange for as long as a profit can be made, so until the equilibrium of one dollar is reached. As a result, the amount of LUNA has decreased, which will increase the price of the Luna token. If at some point there is less demand for the Terra US dollar stable coin, the price could drop below $1. Terra UST holders can then always exchange one UST (now worth less than one dollar) for one dollar of LUNA and make arbitrage profits until the supply has decreased enough to reach the one dollar equilibrium. In this case, the amount of LUNA does not decrease, and the demand increases, as a result of which the price of the token will also increase. The mechanism of two entities relying on each other for stability inspired the names for Terra and Luna.

Who is behind Terra?
Terraform Labs is a South Korean company founded in 2018 with $32 million from Polychain Capital, Pantera Capital and Coinbase Ventures. They created the Terra Network for decentralized global payments and the token LUNA. Terraform Labs is backed by the 15 largest e-commerce companies in Korea and Southeast Asia with 45 million customers.

Luna future
Triaconta added Luna to the Top 30 and DeFi bundles in February for a price of €5.50, after which Luna accelerated to an all-time high of almost €19 at the end of March. In May the correction came back to €5.50 and now after more than two weeks of increase we are already almost at €13. The Terra ecosystem has since been expanded with the Anchor and Mirror protocol. The success of both protocols will drive demand for UST and further increase the value of the LUNA token. With Anchor, Terra dollar deposits can achieve stable returns by investing in multiple leading proof-of-stake blockchains. Mirror enables digital representations of assets such as stocks, ETFs as well as cryptocurrencies Bitcoin and Ethereum. They can be traded on the Mirror platform and on UniSwap. With the right large investors and partners in e-commerce, Terra has good opportunities to become a major DeFi player worldwide from Asia and to grow further through adoption and development of new products.