Terra
Cosmos SDK
Terra is a digital financial system of stable payments and open infrastructures maintained by its native LUNA token which powers decentralized stablecoins, such as TerraUSD coin ($UST). LUNA acts as collateralization for these stablecoins. The stability mechanism is simply that as demand for UST grows, the supply of LUNA decreases (driving its price up) and vice-versa. Rewards for LUNA stakers come from transaction fees, gas, and seignorage rewards that are paid out in stablecoins, rather than like-kind.
A host of other stablecoins are supported by this protocol, including the Korean Won-based $KRT, which has proven to be widely popular in South Korean commerce through the Chai payment platform.
APY | ~6% |
Compounding | Manual |
Reward Distribution Period | Distributed automatically each block |
Unbonding Period | ~21 day to unbonding period |
Validator Self-Bond Requirement | 1 (but 100,032 LUNA required to enter the active set) |
Inflation | None (uses arbitrage mint-burn mechanism) |
Figment Validator Address | terra15cupwhpnxhgylxa8n4ufyvux05xu864jcrrkqa |
Recommended Wallet |
Double Signing | 0.05% |
Downtime | 0.05% |
The easiest way to stake on Terra with your LUNA tokens is with Terra Station.
Using a Ledger hardware wallet device? You can either use the web version or download the software Not using a hardware wallet? Download the Terra Station software for Mac or Windows.
Whether you're using the software or the web version, these instructions should be suitable. From the Terra Station dashboard, 'Sign In' with your login or your Ledger hardware device.
Enter the number of LUNA tokens that you would like to delegate to (aka stake with) Figment.
Confirm your delegation.
That's all! You're delegating. You'll now begin accruing rewards as stablecoins.
Once you have earned stablecoin rewards, you may withdraw them via the staking dashboard.
You can then swap stablecoins for LUNA via the 'Market' part of the dashboard if you would like to increase your LUNA holdings.
Governance is accomplished through interactions by LUNA token holders with proposals that are created by other LUNA holders. Proposers must deposit a minimum of 50 LUNA to create a valid proposal, and proposals are discussed and debated on the forum (Agora) before being voted on in Terra Station. Quorum required is 40%, pass threshhold is 50%, and veto threshhold is 33.4%.
The Terra ecosystem now boasts over 160 native projects. This host of projects is expanding constantly, with heavy contenders such as Anchor, Mirror, Nexus, Terraswap, and South Korea’s CHAI wallet generating mainstream adoption while new projects like Astroport, Mars Protocol, and Andromeda taking functionality to the next level required by experienced blockchain users. Interestingly, Terra recently partnered with the Washington Nationals for a five-year period, which will include sponsorship videos, merchandise, renaming of VIP suites, and even adoption of UST within the stadium itself.
What is staking?
On a Proof of Stake blockchain, staking is the act of depositing tokens in order to become a validator; that is, to participate in proposing and attesting to transaction blocks. Anyone with a minimum necessary coin balance to be a part of the active set of validators can validate transactions and earn staking rewards on these blockchains.
What is the name of the asset being staked?
Terra's native token, LUNA, is used for staking and participating in on-chain governance. Rewards are received in LUNA and a host of stablecoins, including KRT, SDT, EUT, and UST. After being claimed as rewards, these can be converted into LUNA by swapping coins, and vice-versa. While stablecoins can be deposited into protocols like Anchor to earn high-yield interest, LUNA is the only token that can be natively staked on Terra.
Where can I explore the network and create a Terra wallet?
Why Stake LUNA?
Initially, LUNA was being staked to earn rewards from transaction volume inside Terra's economy, taxes, and seigniorage rewards (which is the value gained from issuing new LUNA), and new issuance ("inflationary") subsidies. However, this model has changed due to the fixed supply of LUNA that expands and contracts to maintain UST’s peg to the dollar taking the place of seigniorage rewards, and that taxation has recently been decreased to zero.
Generally, you will earn around 8% annually on your staked LUNA, but that can change depending on the economic conditions of the protocol, including supply and price of LUNA. Staking rewards are paid out in the form of stablecoins, which may be converted to LUNA for staking after being claimed. LUNA also gives stakers the right to vote on policy decisions for how Terra will operate and distribute treasury funds.
How long does it take to stake and unstake?
From the moment you initiate the unbonding process, it takes 21 days to unstake. During this time you will not earn rewards, nor transfer, exchange, or spend your LUNA. There is no unbonding period if you wish to simply redelegate to a new validator, but only one redelegation is possible during the 21-day unbonding period that would have been required for standard unbonding. Regardless of unbonding or redelegating, your LUNA can be slashed during this time if your original validator misbehaves by double-signing or experiences excessive downtime.
When are staking rewards and transfers enabled?
Staking rewards and transfers are currently enabled.
How is staking income disbursed? Is staking income liquid or automatically staked?
Staking income is liquid once claimed, which means you will not need to unstake to withdraw your staking income. Conversion to LUNA and delegation of the claimed reward balance is required for liquid rewards.
As of Dec 26, 2019, the Terra network no longer exclusively pays LUNA rewards. Rewards are received in LUNA and various other stablecoins including KRT, SDT, EUT, UST. To restake rewards, delegators must claim rewards, trade the stablecoin rewards for LUNA, and delegate the balance including the newly created LUNA.
Can I lose potential staking rewards?
Your potential rewards depend on validator performance. When your validator is down, you will not be earning staking income. Likewise, you will not be earning staking income if you initiate the 21-day unbonding process.
Can my staked LUNA be slashed (seized or destroyed)?
Yes, a portion of your staked LUNA can be destroyed. There are two ways this can happen:
- 1.If you delegate to a validator that is offline for over 10000 blocks, you will lose 0.05% of the tokens you have delegated to that validator.
- 2.If you delegate to a validator that signs the same block twice with the same key (also known as double-signing), you will lose 0.05% of the tokens you have delegated to that validator.
Figment insures our clients from slashing and has never had a slashing event.
What is the rate of new issuance (aka "annual inflation") for LUNA? How does the token supply change?
LUNA does not have an issuance rate or inflation. Rewards in Terra come from transaction fees, swaps between Terra tokens, and taxes (currently set to 0). LUNA plays a larger role in collateralizing the mechanisms that help secure price stability for stablecoins on the network.
What affects future yields?
Generally, all LUNA staking rewards come from fees previously accrued by Terra, which includes swap fees resulting from actions such as minting UST from burning LUNA, and burning UST to mint LUNA. Staking LUNA yields both stablecoins and LUNA as a result of this process, with stablecoin fees accruing when LUNA is burned to mint more UST, and vice-versa.
Staking yield itself is a function of the ratio of swaps occurring for LUNA and UST. As the price of LUNA drops when more of it is created by burning UST, yield naturally goes up. This is best expressed with the following function: (stablecoin+LUNA)/Cheaper LUNA = Higher APR
Do I maintain custody of my LUNA tokens? Who or what controls my staked LUNA token?
You can self-custody your Terra LUNA tokens, ideally using a Ledger hardware wallet and Terra Station. Terra’s smart contract takes control of your LUNA tokens while you are staking. Figment has partnerships with a number of top-in-class custodians: For inquiries, please contact [email protected].
How are decisions about Terra made and executed?
Terra uses LUNA token voting for on-chain governance. Governance proposals are discussed on the forum (known as Agora) and are voted on in Terra Station.
Last modified 5mo ago