Terra is a blockchain for issuing algorithmic stable coins and building decentralized finance applications. Stable coins are the cryptocurrencies that are pegged 1:1 to fiat currencies like USD. USDT, USDC, DAI, UST are examples of some stable coins.

USDC is backed by the USD, for every USDC in circulation, there is a USD in their reserve. Whereas, DAI is backed by Ether(ETH). As the price of ETH is volatile, for every DAI in circulation, more than $1 worth of ETH should be in the reserve. MakerDAO is the DeFi platform for issuing DAI.

LUNA is the native token of the Terra blockchain. LUNA plays a crucial role in stabilizing the price of stable coins issued on Terra. UST is a stable coin on Terra which is pegged to USD. LUNA is burned to increase the supply of UST and vice-versa.

The stable coins issued on the Terra blockchain are not backed by anything but the protocol itself. If the price of UST goes up, say $1.03, the protocol burns LUNA to create more UST, which increases the supply of UST, thereby making the price equal to 1 USD. If the price of UST goes down, say $0.98, the protocol buys LUNA with UST to decrease the supply of UST. It is how 1 UST is always be stabilized at $1.

Terra blockchain uses Delegated Proof of Stake consensus of Tendermint. Users stake their LUNA with validators to earn staking rewards. Validators secure the network. LUNA is also used to pay fees on the Terra blockchain. LUNA is priced at $66.38 with a market cap of $26.9 billion. The current circulating supply of LUNA is 403,324,991.

how to create a terra luna wallet

Terra Station wallet

Terra Station is the official crypto wallet of the Terra blockchain. Terra Station dashboard displays your LUNA balance. You can stake your LUNA directly from Terra Station. You can also participate in the governance of the Terra blockchain by depositing 50 LUNA into the governance portal.

To interact with the Terra Station wallet, you have to connect Terra Station Chrome extension. Let's see how we can install and use the wallet.

How to Setup and Use Terra Station wallet

1. Download and install the Terra Station wallet Chrome extension 

2. Terra Station is a non-custodial wallet, which means you own the private keys of the wallet. Create 'New wallet'. Enter a wallet name, set up a password and save the Mnemonic phrase somewhere or write it on paper. Do not share the phrase with anyone. Submit it.

how to create a terra luna wallet

3. You have successfully created a wallet. Now you have the wallet address. As you see in the image above, terra1nptumc4d9grp9ycpv6kne99qdr45m05nvydfga is my Terra LUNA wallet address. Use the wallet address to receive LUNA from Binance, Kucoin, Huobi, or any other exchange that supports LUNA withdrawals.

4. Go to Terra Station and connect your wallet to check the coins in your wallet. 

How to stake LUNA on Terra Station?

1. Go to the staking dashboard on Terra Station 

2. You need to stake your LUNA with a validator. Select a validator with low commission and high uptime. I have selected the validator 'Allnodes'.

how to stake luna on terra station

3. Check the validator details and 'Delegate' your LUNA. Don't delegate all your LUNA, save some LUNA in your wallet for fees. Staking rewards can be checked on the main wallet page.

4. Now you have successfully stake LUNA and ready to earn staking rewards. You'll also receive airdrops in addition to staking rewards.

Terra blockchain is unique and a lot of DeFi applications are going to come up on Terra. Subscribe to our newsletter to get updates on Terra.

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