Terra: A battle between app chains and common chains

Recently, all kinds of new public chains of general smart contracts are getting hot. Solana and Near are leading the rapid growth of the new public chains of general smart contracts. With funding in place, application development is no problem, and DeFi, NFT and surrounding ecology of each public chain gradually take shape.

Terra's Luna has also grabbed attention, rising six-fold in just two months. Just today, Terraform Labs (TFL) launched Project Dawn, Terra's ecological infrastructure and core technologies funding initiative, which has so far unlocked 5 million LUNA (approximately $150 million) for implementation.

Terra's native US dollar stablesoin UST (TerraUSD) has also performed well, surpassing the old compliant stablesoin TUSD with a total market cap of $2.46 billion, according to Cryptoslate data, and ranking fifth on the stablesoin market cap list. Let's take a closer look at Terra, a previously overlooked financial infrastructure.

Photo credit: Cryptoslate

What are Terra, Luna, and UST?

Terra is not a new project, back in January 2018, founderDo KwonandDaniel ShinTerra started construction work in Korea.

Terra is a DPoS Application Specific Blockchain using the Cosmos SDK framework that supports WebAssemble (WASM) smart contracts. It can also interact with IBC complete chain through Cosmos IBC communication protocol. Terra is also one of the earliest application chains in the Cosmos ecosystem.

As the original token of Terra agreement, Luna not only guarantees the on-chain security of Terra in the form of pledge, but also serves as the pledge of the original stablecoin in the application chain of financial attributes, maintaining the stable price of stablecoin. Terra's native US dollar stablecoin UST can be linked across the TerraBridge to Ethereum, BSC and Harmony, and across the Wormhole chain to Solana, enabling different applications in each ecosystem to use UST for their currency needs.

Details of how Luna anchors UST at $1 can be found in an article published last year by the Rhythm InstituteCosmos, triple star in 4 months, how is ecology now?, this paper will not repeat too much.

How does Terra App chain differ from other common smart contract public chains?

First of all, due to the Terra protocol's native staboin, all applications on the chain will have staboin transactions from day one. However, staboins on other chains require the casting and custody support of centralized issuers or the later development of algorithms or collateral staboins, and these staboins cannot be directly linked with the original token of the chain.

Secondly, the growth of the demand for Terra staboin will directly increase the demand for Luna, and the demand for Terra staboin not only happens in Terra domain, but also comes from Terra chain. This is why, with the increase of the market value of UST, Luna's price is soaring along with it. Since Luna is the original PoS pledge token of Terra chain, the price of Luna will directly affect the security of the chain, which means that the higher the price of Luna, the higher the economic value that can be safely carried in Terra chain. For other chains, however, native tokens capture value through in-domain transaction fees, but cannot extend value capture beyond the domain.

Thanks to the high efficiency of the Tendermint consensus, a blockchain developed with the Cosmos SDK framework can achieve throughput of thousands of TPS. This processing power will be exclusively available to applications on the Terra chain, which have a strong need for direct interaction with Terra's native staboins. This is also at the heart of Terra's ecology. For the traditional universal smart contract public chain, although the ecology of each plate is blooming and the number of users is rising, the processing capacity ceiling of the chain will be reached eventually, resulting in the decline of user experience.

Although the general smart contract public chain meets the basic needs of different applications, the underlying framework is rigid, and the application logic needs to be compromised based on the underlying framework. The platform application chain can be customized according to the specific needs of the plate, which is much more flexible than the general smart contract platform. Different applications will find the application chain suitable for their own needs to build.

Application in Terra ecology

DeFi agreement

borrowing

Anchor

Anchor offers a principal protected stablecoin savings product that accepts Terra deposits and pays steady interest. In order to generate income, Anchor can lend out deposits, and the borrower needs PoS assets on the main blockchain that can be easily liquidated as collateral. Therefore, Anchor's revenue is mainly driven by the block rewards of PoS blockchain. The ultimate vision of the Anchor development team is to make Anchor the gold standard for passive income on the blockchain, providing reliable interest rates for stablecoin deposits. For more application details of Anchor, please refer toAnchor: Savings Protocol on Terra Blockchain | Project Introduction

Mars Protocol

Mars Protocol offers both pledged and non-pledged lending schemes to users on Terra's chain. Users can borrow money by pledging UST, LUNA, ANC and MIR. However, for non-pledge loan users, its strategy is similar to leverage liquidity mining. Users can lend out UST by pledging liquidity certificates.

Capital flow management

Pylon Protocol

Pylon Protocol provides payer and payee with a cash flow transmission tool that enables payer and payee with long-term interest binding requirements to reach long-term interest consensus through this agreement.

Suberra

Suberra provides Terra users and merchants with continuous payment in stablecoin.

Payment channels

Chai

Chai is the fastest-growing e-wallet in South Korea, with 2 million active users. Terra users can pay directly through Chai as the fiat currency entry.

MemePay

MemeChat is Mongolia's most popular instant messaging app, and MemePay is a payment tool similar to wechat Pay. Users can purchase Mongolian stable currency TerraMNT directly through MemePay and make payments on Terra chain.

PayWithTerra

Paywith Terra provides cryptocurrency payment capabilities for websites.

Kado

Kado provides USD-UST cash transfer services to users in Terra Ecology.

Kash

Kash provides banking-like services for Terra ecosystem users. Kash completes savings and investment business through cooperation with Anchor and Mirror. Users can also directly use UST for payment and transfer.

Synthesis of assets

Mirror Protocol

Mirror Protocol is the synthetic asset Protocol in Terra's ecosystem. The most interesting of this Protocol is its synthetic asset in U.S. stocks. Users on Terra's chain can use the Mirror Protocol to trade U.S. individual stock indexes.

Levana

Levana provides leveraged token services for assets in Terra's ecosystem.

closedGood polymerization

Appollo DAO

The Appollo DAO is a revenue aggregator in the Terra ecosystem, providing users with automatic revenue compounding capabilities.

Sandclock

Sandclock provides automated cross-chain revenue aggregation for users on the Terra chain. Users who wish to participate in protocol governance can participate not only by purchasing protocol governance tokens, but also by donating mining revenue or principal.

Spectrum Protocol

Spectrum Protocol is the revenue aggregator in Terra's ecosystem. Spectrum provides users with auto-compound and auto-stake investment strategies.

Kinetic Money

Kinetic Money provides users in the Terra ecosystem with the ability to use future revenue in advance.

Investment and finance application

Solidefi Invest

Solidefi Invest offers Terra Eco-users the ability to Invest in stocks, commodities, index funds and crypto assets through the app.

Astral Money

Astral Money provides personal finance services to Terra users.

Orion Money

Orion Money has teamed up with Anchor to provide Terra eco-users with a variety of stablecoin financial services.

ZenGo

ZenGo gives users the ability to buy cryptocurrencies, including Terra's Luna, directly from their mobile phones.

Alice Finance

Alice Finance provides Terra users with personal Finance services. DeFi provides users with high returns and allows them to transfer fiat currency directly through Alice Finance.

Artemis Protocol

Artemis Protocol provides Terra users with easier and easier financial management and token pledge services.

Glow Savings

Glow Savings opens the door to fun and fun money management for Terra users.

Yotta Savings

Terra users can make deposits through Yotta, which gives depositors a lottery ticket and a chance to win prizes worth up to $10 million.

Capapult Finance

Capapult Finance offers Terra users a high yield deposit service.

Mavolo

Mavolo provides Terra users with a wish money management tool.

Spaar

Spaar provides Terra users in the Netherlands with a high yield deposit service.

Tiiik

Tiiik provides Terra users with wallet and wealth management services.

Decentralized exchanges

TerraSwap

TerraSwap is the first DeFi project in the Terra ecosystem, providing users with decentralized asset trading services.

Loop

Loop provides wallet, decentralized exchange, and mobile mining services to Terra Eco-users.

Local Terra

Local Terra provides Terra users with a peer-to-peer trading platform for assets on the Terra chain.

Astroport

Astroport provides a programmable AMM decentralized exchange for users in the Terra ecosystem.

NFT

Talis Protocol

Talis Protocol NFT trading market for the first DAO of all Terra ecologies. The seed round of the Talis Protocol has now been completed and the official token Talis has been promised to the first supported artist.

HERO

HERO NFT is the next GameFi NFT game to be released in the next TERRA ECOSYSTEM update. The story will be about growing from "ordinary" to "hero".

Andromeda Protocol

Andromeda is a next-generation NFT protocol that aims to break the common perception of "NFT= collectibles" and bring NFT as a financial building block to the masses to understand that NFT can also be useful.

Terraworld

Terraworld is the first work-focused meta-universe where business people, employees, entrepreneurs and others seeking low-risk investment can develop their businesses and experiment freely with their ideas.

StarTerra

StarTerra is the Launchpad for the first Gamefi project on the Terra blockchain. In addition, StarTerra itself is a Play2Earn game with a stable revenue and raffle pool.

This chapter covers only all DeFi and NFT projects in Terra Ecology. We can see that all projects in the Terra ecosystem are closely aligned with the Terra Staboin, which is why we call Terra a strong currency chain of applications. At the same time, we can see that Delphi Digital has been involved in many Terra ecological projects and has been very supportive.

In the future we can expect to see more platform-based app chains like Terra with unique in-chain properties that attract different apps to build around them, which may start a battle between app chains and the universal smart contract public chain.

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