Cryptocurrency Terra has outperformed popular digital tokens Bitcoin and ether by rallying over 70% in the last seven days despite volatility, as compared to up to about 15% rise in Bitcoin and ether. Terra price has more than doubled in the last one month as the stablecoin surged over 115% during the period from hovering around $44 level to currently trading at $95.
Terra is a decentralized financial payment network that rebuilds the traditional payment stack on the blockchain. It utilizes a basket of fiat-pegged stablecoins, algorithmically stabilized by its reserve currency Luna, to facilitate programmable payments and open financial infrastructure development. As of December 2020, the network has transacted an estimated $299 billion for over 2 million users as per Coingecko.
Luna, the reserve currency of the Terra platform, has three core functions which are to mine Terra transactions through staking, ensure the price stability of Terra stablecoins and provide incentives for the platform’s blockchain validators.
Terra is up over 12% in 2022 (year-to-date or YTD) so far, whereas the most popular crypto Bitcoin has fallen about 4% during the said period. The stablecoin is 8% far away from its all-time high level of $103.
The recent volatility in cryptocurrencies has come amid a broader market selloff amid escalating geopolitical tensions due to the ongoing Russia-Ukraine crisis. The volatility has also been driven by investors recalibrating their portfolios to account for a more aggressive Fed, which is now expected to raise rates as many as seven times this year as it fights surging inflation.
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