How the Terra network works

The Terra network is built on the Cosmos software development platform and uses the (Tendermint) representative stock consensus mechanism. Although the protocol currently relies on 130 validators, which are based on the maximum amount of shares represented, the number of network validators is set to increase to 300 in the future.

The main task of network validators is to verify and settle transactions and ensure network security by executing complete nodes to stabilize blocks in the chain. Simply put, validations in stock-based algorithms have a similar role to miners in proof-of-algorithm-based blocks; They provide security for the network and help maintain its consensus.

Users must either lock their Luna tokens in the network for at least 21 days or leave the stake of their Luna sticks to other users in order to be valid or minor in the Tera network. To become a stake, Luna Stickers can represent their tokens to creditors.

About LUNA & UST

It all has to do with arbitrage. This usually refers to the process of making small profits by finding discrepancies between asset prices on different exchanges. However, in the case of LUNA and UST, it works slightly differently.

In the Terra ecosystem, users can always swap the LUNA token for UST, and vice versa, at a guaranteed price of $1 – regardless of the market price of either token at the time. This is important to note because it means if demand for UST rises and its price rises above $1, LUNA holders can bank a risk-free profit by swapping $1 of LUNA to create one UST token (which due to a rise in demand in this example, is worth more than $1).

During the swapping process, a percentage of LUNA is burned (permanently removed from circulation) and the remainder is deposited into a community treasury. Funds in the treasury are then used to invest in applications and services that expand the utility of the Terra ecosystem.

Burning a percentage of LUNA tokens reduces the number of overall tokens left in circulation, making them more scarce and, therefore, more valuable. By minting more UST tokens, it has the effect of diluting the existing tokens in circulation and bringing the overall price back down to its $1 level.

Similarly, if demand is low for UST and the price falls below $1, UST holders can exchange their UST tokens at a ratio of 1:1 for LUNA – which is worth more because of their scarcity and so the user can bank another risk-free profit.

Methods

• The result of my research for the past 90 days
• In next two graph I will show you the amount of burned LUNA for minting UST and the amount of UST burned

As you see in the diagram, in first 30 days the trend of burned luna reciprocally the supply of UST was growing but then the trend was descending but this time the situation is different because even with the downtrend burned the supply of UST was growing up.In past 2 months we see demand for the UST has fallen as a result less luna is burned.

Conclusion

This chart, like the chart above, has a lot of fluctuations but this chart has a big difference That is, the volume of UST burned is very large which reflects the demand for LUNA

In first 30 days request for UST Increases so most of users swapped their LUNA to UST and Circulation supply of UST increases.

And since for the UST mint an equal amount of LUNA must be Burnt and taken out of the Circle, the circulation supply of LUNA decreases.

This reduces the number of LUNA tokens and thus increases its value. And increases the value of the LUNA over time. Demand for UST is high until a new project is launched on the Terra network.

So this demand for UST increases the value of the LUNA token and consequently the entire Terra ecosystem.

When we talk about demand!

Terra strategy to buy BITCOIN

Do Kwon, co-founder of Tera (LUNA), has announced plans to accumulate $ 10 billion in bitcoins to add to the reserves of the UST. He stressed that the stable TerraUSD (UST) with the support of $ 10 billion in bitcoin reserves will create a new monetary era of the bitcoin standard.