The cryptocurrency trade is stuffed with a great deal of jargon and distinctive quirks — even these with the monetary know-how discover the crypto markets difficult. There are lots of crypto-specific components that affect the expansion, adoption and returns of this rising blockchain-powered trade.
When making an attempt to grasp the nuances of a particular cryptocurrency, it may be useful to think about a crypto challenge as one thing just like a high-growth start-up.
Enterprise Capital funds — in any other case referred to as “VCs” — pool collectively cash from completely different buyers to put money into a basket of start-ups and ask three necessary questions earlier than making any funding:
Query 1: What does this firm supply that the others don’t?
Query 2: Is that this firm exhibiting development and curiosity in its product?
Query 3: What drawback does it clear up and the way large is the marketplace for this drawback?
“Answering the identical questions on the subject of cryptocurrency investing is smart and is the method that {many professional} cryptocurrency buyers take when evaluating what to put money into,” explains Brett Hope Robertson, Crypto Funding Lead at Revix.
By asking these questions of the top-performing crypto of 2021 (LUNA) we get to peek into all of the potential that the Terra community has to supply.
What are Terra and LUNA?
The Terra community is a cryptocurrency that’s completely different to Bitcoin however is comparable in performance to Ethereum, Cardano and Solana.
Bitcoin is a hybrid digital funds system and digital gold funding possibility. Ethereum, Cardano and Solana, then again, are referred to as “sensible contract” enabled cryptocurrencies. In contrast to Bitcoin, these cryptocurrencies allow functions to be constructed on high of their blockchain networks — similar to you could have completely different apps that run in your cell phone’s working system.
The Terra community, with its native cryptocurrency LUNA, can also be a sensible contract enabled cryptocurrency, however what separates it from the others is that it has a really completely different focus. In the event you have a look at Terra as an organization, it may very well be seen as a mixture of a financial institution (like FNB) and a funds community (like Visa) that goals to make banking and funds cheaper and quicker.
It is likely to be stunning to some that the Terra networks’ LUNA cryptocurrency was the most effective performing funding over the past yr, returning over 14 700% in 2021.
In truth, an R1 000 funding in LUNA would have translated into +R147,692 over the previous 12 months. This return on funding is over 240x higher than should you had invested in Bitcoin over the identical interval. The latter would have provided you an funding quantity right this moment of +R1,594.
That is an astonishing return that has made all of the LUNA tokens in existence (referred to as the market cap of the community) value over $20-billion. That’s roughly the identical whole worth because the MTN and over 5x the overall worth of Woolworths.
Astonishing returns, however what’s driving this worth?
The Terra community is likely one of the main sensible contract enabled blockchain networks aiming to rebuild the gradual and costly fee system that now we have right this moment. Terra does this by way of the creation and switch of stablecoins.
Stablecoins are merely cryptocurrencies which might be pegged to standard government-backed currencies (i.e. the rand or US greenback).
The Terra blockchain community permits its customers to spend, save, commerce, or alternate these stablecoins immediately. All of this may be carried out on the Terra blockchain with out the necessity for any banks or monetary intermediaries.
One of the best ways to simplify what Terra does is to think about it because the foundational enabling layer for terribly distinctive and groundbreaking FinTech functions.
You’ll be able to consider investing in Terra like investing in a basket of FinTech and banking apps, every with its particular use case and potential buyer. Reasonably than having possession of 1 app, you could have the possibility to personal the foundational software layer that runs essentially the most profitable FinTech apps. That variety of functions might develop as a lot as builders are keen to construct on Terra’s community.
Listed here are the components that drove LUNA’s 2021 returns:
- The numerous technological developments of the Terra community that improved scalability and performance
- Over 70 newly confirmed initiatives are set to be constructed on Terra this yr, which is likely one of the largest pipelines within the crypto and blockchain area
- The potential of the Terra community to win over the market share of a really giant market.
What’s LUNA?
LUNA is the Terra protocol’s native cryptocurrency and one of many high 10 largest cryptocurrencies as measured by market cap.
The LUNA token serves two functions: to create and stabilise the value of the stablecoins on the protocol, and to provide its holders governance rights over how the community is run.
By specializing in stablecoins, the Terra protocol has made monetary functions very environment friendly. This, because of this, has amassed billions of {dollars} in worth. Terra customers can ship cash to 1 one other in a matter of seconds, earn curiosity on their financial savings and even take out a mortgage.
Ought to I purchase Terra’s crypto LUNA?
Time to suppose like a VC. That you must ask your self what drawback is being solved? Is Terra seeing adoption? And, how large is the promote it goals to disrupt?
The Terra community is:
- Making the worldwide funds system extra environment friendly
The Terra blockchain can deal with over >10,000 transactions per second at near-zero value, even on weekends. Visa, which processes 1,700 transactions per second, solely transacts on weekdays and prices over 100x extra.
- Seeing explosive development
Although Terra continues to be comparatively new, it has amassed huge quantities of worth. Terra’s Chai fee system has two million customers, and in response to Terra’s web site, processes greater than $1-billion in transactions every year.
- Additional development potential
The worldwide FinTech markets and funds sector is valued at over $160-billion and is predicted to develop to $310-billion at an annual development fee of 24% by way of 2025. Stablecoins, which Terra allows by way of its blockchain community, have opened a multi-trillion-dollar alternative within the funds and finance area and have seen development from $5-billion to $170-billion in provide. Terra’s stablecoins might obtain a 20% market share by 2025 from lower than 8% at the moment in 2022.
The place can I purchase LUNA?
Cape City-based crypto funding platform Revix (www.revix.com) would be the first platform in South Africa to supply Terra (LUNA).
Revix’s platform makes crypto investing easy. You may get began in simply a few minutes, and use their on-line platform to verify in in your crypto everytime you need, wherever you’re.
With Revix you’re in protected palms. Not solely is the fintech backed by JSE listed Sabvest however they have been the primary platform in South Africa to carry out a proof-of-reserves audit independently verifying that every one their clients’ property are protected and safe.
Revix can be providing LUNA from 25 February 2022, with an attractive fee-free promotion on all investments.
Revix Promotion
How would you make investments should you knew you couldn’t lose? Revix is supplying you with that probability. From 16 to twenty-eight February, Revix is providing you the chance for an funding that can’t lower in worth. And if it does, Revix has you lined. It’s your probability to become profitable and diversify your portfolio with the boldness you can solely win.
How do I participate?
Sign up utilizing the promo code: COVER. After signing up, it is advisable make investments R5 000 into both the Good Contract Bundle, the High 10 Bundle or the Cost Bundle between 16 February and 28 February 2022*. Throughout this era, your funding is roofed towards loss. If the worth of the Bundle has decreased by the top of the promotion interval, Revix can pay you again the distinction. It’s that straightforward. You can be compensated in Bundle items solely. *T&Cs apply.
