What is Terra?

Terra is a Cosmos-based Layer 1 blockchain designed for programmable money and decentralized applications. Originally known for its algorithmic stablecoin ecosystem, the Terra blockchain has since transitioned to Terra 2.0, a new chain focused on community-led innovation, decentralized governance, and sustainable token economics. Terra 2.0 no longer includes UST, and operates independently from the original collapsed Terra Classic network.

A Community-Driven Reboot

Launched in May 2022, Terra 2.0 was created to preserve the developer ecosystem and rebuild user confidence following the UST/LUNA crisis. The new chain is entirely separate from Terra Classic (LUNC), with no algorithmic stablecoin, and places a renewed emphasis on:

• DApp development

• IBC interoperability

• DAO governance and experimentation

Despite its turbulent history, Terra still hosts active projects, builders, and staking opportunities—driven largely by community engagement.

The LUNA Token

LUNA is the native utility and staking token of the Terra 2.0 blockchain. It has several critical functions:

• Staking: LUNA holders secure the network via delegated proof-of-stake and earn block rewards.

• Governance: Stakers can vote on protocol proposals, software upgrades, and treasury decisions.

• Utility: LUNA is used to pay transaction fees and interact with dApps on the Terra network.

By staking LUNA, participants contribute to the security and governance of a resilient Layer 1 chain that continues to evolve post-crisis.

Cosmos SDK and IBC Connectivity

Terra 2.0 is built using the Cosmos SDK and is fully compatible with the Inter-Blockchain Communication (IBC) protocol. This allows Terra to:

• Send and receive assets to/from other Cosmos chains

• Enable cross-chain functionality with dApps like Astroport, Mars, and others

• Integrate with IBC-based wallets and DeFi platforms

This positioning enables Terra to remain interoperable despite the challenges its predecessor faced.

Current Status and Ecosystem

Terraform Labs—the original core development team—is in the process of winding down as of September 2024. However, Terra 2.0 continues to function as an independent chain operated by community validators. New proposals, forks, and initiatives are being explored by independent builders who remain committed to the chain’s development.

The network supports various dApps and experimental governance systems, and has even been viewed as a “testbed” for decentralized coordination.

Why Stake LUNA?

Staking LUNA provides users with passive rewards, governance power, and alignment with a blockchain that is rebuilding itself through community leadership. While the protocol has faced significant challenges, the new iteration of Terra offers opportunities for those interested in network experimentation, DAO tooling, and cross-chain Cosmos integrations.