Terra Classic (LUNC) FAQs
Everything you need to know about Terra Classic (LUNC) inside of Exodus.
In this article:
- What is the Terra protocol?
- How does the algorithmic peg work?
- Can I stake LUNC in Exodus?
- What Terra tokens does Exodus support?
What is the Terra protocol?
The Terra protocol specializes in hosting algorithmic stablecoins for a variety of currencies. Terra allows users to submit their local currency to be pegged as a stablecoin on the Terra blockchain.
So, unlike many stablecoins that are solely based on the US dollar (USDT, USDC, TUSD, etc.), Terra stablecoins come in many currency pegs, such as KRT (Korean Won), EUT (Euro), MNT (Mongolian Tugrik), and many more, including UST (US Dollar).
Terra tokens are stablecoins that track the price of fiat currencies and are created by users burning LUNC. While users can submit their local currency as a stablecoin peg, the base Terra stablecoin tracks the price of an international reserve asset created by the IMF called SDR (Special Drawing Rights). This base Terra stablecoin is called TerraSDR or SDT.
LUNC is the Terra protocol's native staking token which is also used to absorb the price volatility of Terra stablecoins. LUNC staking rewards are from transaction fees on the Terra blockchain. LUNC is also used for governance on the Terra blockchain.
How does the algorithmic peg work?
Terra/LUNC is a two-token system designed to algorithmically keep its stablecoins pegged to their values.
If the price of UST goes higher than its peg, the protocol will incentivize users to burn LUNC and mint Terra. This increases the supply of Terra, decreasing its price, and decreases the amount of LUNC, increasing its price.
Then vice versa, if the price of UST goes below its peg, the protocol incentivizes users to burn Terra and mint LUNC. This decreases the supply of Terra which increases its price, and increases the supply of LUNC which decreases its price.
The names Terra and Luna are intentional as this system is inspired by the gravitational pull between the moon and the earth.
Can I stake LUNC in Exodus?
No. Currently, LUNC is available to send, receive, and exchange in Exodus.
What Terra tokens does Exodus support?
Terra tokens (CW20 tokens) are assets that live on Terra's network. Sending Terra tokens requires some LUNC to pay transaction fees (also known as gas). To learn more, visit: How do I send or exchange an asset that runs on another network?
In your Exodus wallet you can send, receive, and exchange these Terra tokens:
|Anchor Protocol (ANC)||ANC is the governance token of the Anchor Protocol. Anchor Protocol is a lending and borrowing protocol offering up to 19.5% yield on stablecoin deposits.|
|TerraUSD (UST)||TerraUSD (UST) is the decentralized algorithmic stablecoin of the Terra blockchain.|
|Bonded Luna (BLUNA)|| Bonded LUNA is a bAsset token for the Terra Blockchain. It’s backed by LUNC and can be bonded on Anchor Protocol to allow for borrowing and staking rewards.