Terra (LUNA)

LUNA is the core economic token of the network. Users spend it as gas when interacting with smart contracts, transferring assets, or using applications built on Terra. Token holders can also stake LUNA with validators, helping secure the blockchain and earning staking rewards in return. Validators run the infrastructure that proposes and confirms blocks, while delegators can support validators without operating their own nodes. As with other proof-of-stake systems, poor validator performance or malicious behaviour can lead to slashing penalties.

The network uses Tendermint-based consensus, a widely used framework in the Cosmos ecosystem, which allows validators to agree on the state of the chain and finalise transactions. LUNA also gives holders voting power in governance, where proposals can cover software upgrades, parameter changes, treasury spending, and ecosystem initiatives.

Terra’s investment case is tied to whether developers and users continue to build activity around the chain after its difficult history. Its role is no longer primarily that of a stabilisation asset for a payments-focused stablecoin system, but that of a governance and staking token for a community-led smart contract network.