Strong speculative demand leads to wild fluctuations in the price of Bitcoin and other alternative cryptocurrencies.  The volatility factor is a major road block in the adoption of Bitcoin as a store of value. 

The problem in paying with Bitcoin is that nobody will be interested in paying with an asset that will double in value in no time.  This is also true in cases where the price will go low down, which is bad for someone who accepts its value.  The reliability of the store of value is an issue. Many times, the transaction times are very high, which is also an issue.

Terra Protocol solves these issues.  The core idea is that a cryptocurrency with elastic monetary policy will be able to provide for a stable price.  Thus, making it possible for Bitcoin to be used in everyday transactions.

Terra recently stated that they are thrilled to welcome investors old and new to the Terra vision. They have to state that they are looking forward to what the future holds and are interested in inviting the crypto community to join in building on the Terra blockchain to make savings, payments, and investing simpler and more accessible.

Why TerraUSD (UST)

There are lot of USD stable coins already and TerraUSD is here because there has been a recent spike in stablecoin demand on DeFi and none of these already existing stable coins are scalable.  TerraUSD is yield bearing, scalable and functions well between interchains.

TerraUSD is expected to be useful to many ecosystems and apps and eventually help DeFi finally scale.  The kind of users who demand to use a particular cryptocurrency or stable coin is very important in determining the performance of the stable coin.  The intention of the users, the numbers of users and the frequency of use will decide the extent to which the stable coin or crypto should scale.  The infrastructure on which a stable coin is situated will decide its scalability potential.

The monetary policy of a stable coin type should suit the reason for which the users are seeking to use the particular token. Every stable coin has one kind of scalability problem or the other.

For clarity, TerraUSD is an algorithmic stablecoin and the cost of minting is equal to the face value of the stablecoins minted.  Therefore, if 1 TerraUSD should be minted only $1 worth of the reserve asset ($LUNA) should be burned. Also, the TerraUSD monetary policy is infinitely scalable and therefore it is boasts of the capability to help DeFi apps and protocols to achieve their full potential without restrictions.

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