What is Terra
Terra is a decentralized Proof of Stake (PoS) blockchain protocol. It uses a basket of fiat-pegged stablecoins which are algorithmically stabilized by its native crypto asset, LUNA. Terra is aimed at the mass adoption of cryptocurrencies. To accomplish this ambitious goal, Terraform Labs, the company behind Terra, is developing an entire ecosystem of financial platforms.
What is Luna
LUNA is the native staking token of the Terra protocol and foundational asset for the entire ecosystem. It has two core functions which are ensuring the price stability of Terra stablecoins and providing incentives for the platform’s validators. Since LUNA is the stability mechanism, LUNA delegators are entitled to earn rewards for providing network security.
Where to buy LUNA?
You can buy LUNA on a number of popular exchanges, including the world’s top exchange in terms of trading volume Binance. Also note, there is no minimum requirement to stake LUNA for delegators.
How to delegate Luna (Staking)
Stake your Luna to a validator to start earning rewards. Before you stake, make sure you have Luna in your wallet. You can transfer Luna from an exchange or swap coins you have for Luna.
- Open Terra Station and click Staking.
- Select a Validator and click on their name in the Moniker column of the validator list.
- In the My delegations section, click Delegate. A new window will appear.
- In the Amount field, specify the amount of Luna you want to delegate, and click Next.
Always keep some coins to pay fees with. Never stake your entire wallet amount. Without money for fees, you can’t make any transactions.
- Double check the amounts and fees. Enter your password and click Delegate.
Congratulations, you’ve just delegated Luna!
When to receive first staking reward
Rewards start accruing the moment you stake Luna.
What is the unbonding period on Luna
When you decide to undelegate your LUNA tokens, there is a 21 day unbonding period during which neither rewards accrue nor your LUNA tokens can be freely traded.
Are there any risks while delegating LUNA tokens?
There is a risk of loss of funds if a validator misbehaves. In this case, its stake will be penalized, hurting both the validator and those who stake with it. For example, the slash for double signing will be at 5%, and if the validator experiences significant downtime or does not participate in the oracle process, the slash will be at 0.01%. Therefore, it is crucial to choose the validator with a good reputation like 01node.
To know more about Terra’s ecosystem