Terra has a fixed peg ratio with the USD of 1 to 1. That is, 1 Terra is equal to 1 USD. Terra is used for payments and for trading. You can also find it at Solana Chain. Terra is a Stable coin.
The stable ratio to the USD is achieved by using Luna. Luna is the token that provides stability. While the Terra price is regular, the Luna is changing. Luna volatility ensures price stability on the Terra. The price of Luna varies according to the circumstances and depending on the pool of Terra. This is done so that a stable exchange rate of Terra with one dollar is always achieved.
So in the short term Luna has changed. It rewards Luna owners in the long run for providing financial stability to the terra ecosystem. It is the best means of passive income from cryptocurrencies.
Understanding it a little better as the moon is necessary for the earth's gravitational field and interacting so is Luna's relationship with the terra and helps us have better stability in the Terra ecosystem.
Terra stability is critical. When we use a currency for payments we want above all to be stable. We do not wish for a highly volatile price.
Control of Terra volatility and fluctuation in pool liquidity is achieved by using the Luna cryptocurrency. Anyone who wants for more High risk and speculative purposes the Luna is the best currency. In the short run there is volatility and fluctuations. In the long run, however, it is rewarded for providing stability to the system. Luna holders receive high returns.
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