Iconium invest in Terra – An Algorithmic Stablecoin
When we launched Iconium Blockchain Ventures in early 2018 as the first (and still only) italian investment vehicle in digital assets, we were convinced that blockchain technology would revolutionize many industries. When we came across Terra, it didn’t take us long to get enthusiastic about the project and decide to invest. Terra is a blockchain fintech startup that is preparing to launch its price-stable algorithmic cryptocurrency, or stablecoin. Terra is aiming to redesign the future of money.
But why did we invest specifically in Terra, given that in the last year or so the announcements of new stablecoins have been plenty and of all types: FIAT backed, crypto backed, algorithmic?
- Terra is not building a stablecoin to serve the crypto space, but is enabling the underlying technology to go out and give non crypto users a better payment experience in everyday life, whether they are crypto users or not. Terra has built an incredible Alliance in Asia, which includes industry giants such as TicketMonster (eCommerce, Korea), Woowa Brothers (food delivery, Korea), Tiki (eCommerce, Vietnam), and Carousell (eCommerce, Singapore). To date Terra has partnered with over 15 platforms that have overall $25 billion in annual transaction volume and 45 million users. TerraX, the payment platform which will serve these millions of users, will be launched within the next couple of weeks. Wow!
- Team: we were impressed by the curriculum of the team and their past and recent accomplishments. But even more impressed by the incredible ability to explain every aspect of the project in detail and the clear execution focus of the team. Our conversations with Daniel Shin and Do Kwon quickly convinced us of the clear vision of the Terra founders.
- Asia, as a start of the global journey. While we are excited to see the launch of Terra in Korea and SE Asia, with the opportunity that the Alliance drives fast user adoption across the major asian e-commerce portals, we also see the disruption that Terra can bring to Europe’s “more traditional” payment industry. We don’t see the initial focus of Terra on Korea and SE Asia as a geographical limit, but rather as a first step on a journey to truly improve users payment experience, globally.
How does it work? It is built on the Terra stablecoin and Luna token, which enables the expansion and contraction of the money supply. Both tokens will get listed prior to the launch of TerraX. The success of Terra will be driven by two key factors: stability and growth.
- Stability: the Luna tokens absorb the price volatility, enabling a decentralized “central bank” like monetary policy. In turn, the Luna tokens are compensated for their action with transaction fees from the Terra economy.
- Growth: as the Terra economy grows, Terra uses seigniorage created by its minting operations as transaction stimulus ( i.e. discounts to users) thereby facilitating adoption and growth.
Terra’s mainnet Columbus will be launched within April. The Terra dPoS chain uses Tendermint’s consensus algorithm and reached an average TPS of 7,000 during testnet, which will be an exciting result at launch with the incredible volume it is planning to take on through its Alliance members.
Waiting time is now almost over. With the launch of Terra just around the corner and millions of users outside the crypto space about to experience TerraX, we’re sure the Terra team is as usual heads down, working to make their initial vision a success.
The future of money is starting to look a little closer.
Needless to say, we also love Luna and Terra tokens as they are Italian words! Terra (Earth) will bring Luna (Moon) in Space! 🙂