Why I’m bullish on Terra money
Token: $LUNA
Market Cap: $18bn
There has been much shared about Luna and projects on Terra, but I really don’t think that most people understand WHY Luna is SO bullish.
For me... this is a top-3 coin in the next 3-5 years. Let me try to explain why...
Luna is not like other primary blockchain coins. Most of these (ETH, Matic, FTM etc) are used to pay for gas. Growth of projects on their blockchains results in increased demand to pay for gas - witness the explosion of ETH and SOL as NFTs became cool, or the increase in AVAX when Avalanche incentivised new projects on the chain. Contrast this with gas on Terra, which is mostly paid in $UST (Terra's stablecoin), not Luna. So what drives demand for Luna? Well, this is where the magic begins. Luna's value comes from the expansion of $UST - it is a play on the expansion of $UST, wherever $UST may be (on Terra, or on other blockchains, or on exchanges). As each $1 of UST is minted, $1 of Luna is burnt. So to understand the potential for Luna to grow, we need to consider the potential for $UST to grow. Here's where it gets exciting....
1) The need for stablecoins to scale: One of the main challenges for the growth of the whole crypto market is that the traditional stablecoins are centralised and difficult to scale. Just consider the FUD surrounding USDT (that it is questionable that every $ of USDT is actually backed by hard currency), or that USDC and BUSD are owned by CEXs and potentially subject to regulation and counterparty risk. $UST is fully decentralised and scalable, being secured by the value of Luna. We need more UST?...no problem, just mint it in exchange for Luna. Who owns $UST? Nobody... it is decentralised
2) The demand for UST is about to explode: Terra has just come of age. Before AVAX and Fantom's announcement of incentives to build their ecosystems, Terraform Labs had already done this, and new projects are just starting to launch. Each of these projects will drive exponential demand for $UST as Terra's economy grows through the multiplier effect. Projects include fiat on-ramps for normies to get into crypto (Pylon, Loop), insurance to cover smart contract risk (Ozone), oh and NFTs of course (which are going crazy...surely a sign that the masses are coming?!)
3) The demand for UST is about to really explode: UST does not just live on Terra. It has already been ported to ETH, Solana, Harmony and BSC. UST is on Coinbase and Kucoin (but not yet Binance).
So investing in Luna is effectively a leveraged play on the growth of crypto as a whole, and USTs role in driving that growth. If we need an algorithmic decentralised stablecoin to enable defi growth without reliance on centralised bodies like Tether. If fiat on-ramps are needed for normies to channel money into crypto. Then UST will be massive. And Luna holders will be rich..
