The Cryptocurrency Terra Has Outperformed the Popular Digital Token Bitcoin And ether by rallying more than 70% over the past seven days despite volatility, compared to gains of nearly 15% in bitcoin and ether. The price of Terra has more than doubled in the past month as the stablecoin has gained over 115% during this period from the level of $44 that is currently trading at $95.
Terra is a decentralized financial payments network that rebuilds the traditional payment stack on the blockchain. It uses a basket of algorithmically stable, fiat-pegged stablecoins powered by its reserve currency, Luna, to facilitate programmable payments and open financial infrastructure development. According to Coingecko, as of December 2020, the network has processed an estimated $299 billion in transactions for more than 2 million users.
The Terra platform’s reserve currency Luna has three main functions, which are to mine Terra transactions through staking, ensure price stability of the Terra stablecoins, and provide incentives for the platform’s blockchain validators.
Tera is up more than 12% in 2022 (Year-to-date or YTD), while the most popular crypto bitcoin has fallen around 4% during the said period. The stablecoin is down 8% from its all-time high of $103.
The recent volatility in cryptocurrencies comes amid a broad market sell-off amid rising geopolitical tensions due to the Russia-Ukraine crisis. Volatility has also been driven by investors rebalancing their portfolios to account for the more aggressive Fed, which is now expected to raise rates by up to seven times this year as it fights rising inflation.
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