What is LUNA?
LUNA is the native token of the Terra network. Terra is a decentralised financial network that allows for the creation of decentralised applications and cross-chain stablecoins. Terra was built using the Cosmos SDK by Terraform Labs, which was created by the Terra Alliance. The Terra Alliance is a conglomerate of 15 e-Commerce companies in the Asia-Pacific region. LUNA is used for minting stablecoins on the Terra network. When a user of the network wants to create a stablecoin, they must burn the equivalent amount of LUNA to mint the stablecoin. This can also be done in the opposite direction, allowing for the minting of LUNA through burning the equivalent amount of stablecoins. This system ensures that Terra stablecoins always maintain their fiat peg due to arbitrage incentives. LUNA is also used for governance of the Terra network and staking.