How’s crypto market for you? Today Im checking Luna
Luna is the reserve currency of the Terra platform. It has three core functions: i) mine Terra transactions through staking, ii) ensure the price stability of Terra stablecoins and iii) provide incentives for the platform’s blockchain validators.
The Terra protocol runs on a Proof of Stake ( PoS ) blockchain, whereby miners must stake their Luna in order to mine transactions. All else being equal, a validator who has staked more Luna has a higher chance of generating the next Terra block compared to another validator who has staked less. In essence, Luna represents a validator’s mining power.
However, in providing network security and validation, Luna holders and stakers are exposed to the price risks associated with the asset. This is because the Terra protocol readily exchanges Terra stablecoins for Luna at their determined exchange rate to maintain the peg. When demand is high and prices are above the peg, it will sell stablecoins for Luna. When demand is low and prices are below the peg, it does the opposite. In this way, validators absorb the short-term of the network.
what do you thing about Luna, can it hit its all time high?
Targets 12 – 15 -17
Stop loss 11 – 10
have a nice day