In the cryptocurrency world, there are many projects that try to establish themselves as leaders in their field. These are usually called “native currencies,” and they attempt to become the default payment system for their industry. For example,
In this article we will focus on two projects that both work towards this goal: Luna and Stellar (XLM). We’ll compare these two projects and see how they differ from each other.
What is Luna
Luna is a decentralized, open-sourced, peer-to-peer network that allows users to send money around the world at no cost and with no middlemen. Luna’s goal is to make global commerce more efficient by allowing people all over the world to transact directly with each other.
Because there are no central authorities controlling Luna’s blockchain or issuing new coins on its network, it’s designed so that you can use it without having an account or giving up any personal information about yourself at all–and still be able to send and receive payments just like any cryptocurrency would allow you do today (but without excessive fees).
LUNA has gained attention for its role in powering the Terra ecosystem and enabling efficient cross-border payments, remittances, and decentralized finance (DeFi) applications. It offers benefits such as low transaction fees, fast settlement times, and stability due to its connection with stablecoins. Additionally, LUNA holders can participate in the governance of the Terra blockchain by staking their tokens and voting on proposals that shape the platform’s future.
Luna, along with Terra Luna Classic (LUNC) is a result of the original Terra network, which experienced a crash in May 2022. Following the crash, the community decided to focus on rebuilding the network, leading to the creation of two parallel Terra blockchains: the original Terra network with its token renamed to Luna Classic (LUNC) and a newly launched blockchain with a native token called Luna (LUNA).
As of now, the LUNA price (LUNA) is $0.6155, with a 24-hour trading volume of over $43 million compared to LUNC price live of $00009537. The market cap of Luna is over $179 million, with a circulating supply of more than 290 million LUNA.
Purpose of Luna
The primary purpose of Luna crypto, the native token of the Terra blockchain, is to maintain the stability of Terra’s stablecoins, such as TerraUSD (UST). Luna serves as a collateral asset that helps achieve the peg to the dollar for Terra stablecoins and reduces market volatility.
Additionally, Luna can be used to pay transaction fees and as a governance token, allowing holders to participate in the platform’s governance system by creating new proposals and voting on them.
What is XLM
Stellar is a blockchain-based distributed ledger technology (DLT) that allows you to send, receive and trade different currencies. It has its own cryptocurrency called Lumens (XLM).
Lumens are the native asset of Stellar’s decentralized network. They’re used to facilitate multi-currency transactions through a process called pathfinding. Pathfinding means finding the lowest cost way for your transaction to go through by connecting multiple lumens together into one chain of payments until it reaches its destination. This process helps make exchanges cheaper because it reduces the number of intermediaries needed to make them happen.
Purpose of XLM
The primary purpose of XLM crypto, also known as Stellar Lumens, is to facilitate fast, low-cost, and efficient cross-border transactions on the Stellar network. Stellar is an open-source, decentralized payment network that uses blockchain technology to enable users to transfer funds quickly and at a very low cost. XLM serves as the native currency of the Stellar network and is used for paying transaction fees and as a bridge currency for cross-asset transfers.
Stellar Lumens (XLM) serves multiple functions within the Stellar ecosystem. It acts as a bridge currency, facilitating the exchange of different assets and currencies on the Stellar network. XLM also plays a role in combating spam and maintaining network security by requiring a small fee (lumens) for each transaction. Moreover, XLM holders can participate in the Stellar Consensus Protocol (SCP) by staking their tokens, contributing to the network’s security and consensus mechanism.
Luna Vs XLM
LUNA and XLM are two different cryptocurrencies that serve distinct purposes in the crypto space. Here’s a comparison between LUNA and XLM:
LUNA is the native cryptocurrency of the Terra blockchain, which is a decentralized blockchain platform designed to facilitate stablecoin transactions. LUNA plays a crucial role in stabilizing the value of Terra stablecoins, such as UST (TerraUSD), by utilizing an algorithmic mechanism called the Terra Money Protocol (Terra Protocol). The Terra Protocol ensures that the value of stablecoins remains pegged to a specific fiat currency, such as the U.S. dollar.
LUNA has gained attention for its role in powering the Terra ecosystem and enabling efficient cross-border payments, remittances, and decentralized finance (DeFi) applications. It offers benefits such as low transaction fees, fast settlement times, and stability due to its connection with stablecoins. Additionally, LUNA holders can participate in the governance of the Terra blockchain by staking their tokens and voting on proposals that shape the platform’s future.
While XLM, also known as Stellar Lumens, is the native cryptocurrency of the Stellar blockchain network. Stellar aims to facilitate fast and low-cost cross-border transactions and enable financial inclusion for individuals who lack access to traditional banking services. The Stellar network operates as a decentralized platform that connects various financial institutions, payment systems, and individuals, allowing them to transfer assets and conduct transactions efficiently.
Stellar Lumens (XLM) serves multiple functions within the Stellar ecosystem. It acts as a bridge currency, facilitating the exchange of different assets and currencies on the Stellar network. XLM also plays a role in combating spam and maintaining network security by requiring a small fee (lumens) for each transaction. Moreover, XLM holders can participate in the Stellar Consensus Protocol (SCP) by staking their tokens, contributing to the network’s security and consensus mechanism.
While both LUNA and XLM operate in the cryptocurrency space, they have different purposes and use cases. LUNA primarily powers the Terra ecosystem, facilitating stablecoin transactions and offering stability, while XLM focuses on enabling fast and cost-effective cross-border transactions and connecting various financial entities within the Stellar network.
What is the relationship between Terra and LUNA?
XLM and LUNA are two different cryptocurrencies with distinct purposes and ecosystems. XLM, or Stellar Lumens, is the native token of the Stellar network, which is a decentralized, open-source blockchain platform designed for cross-border transactions and remittances.
LUNA, on the other hand, is the native token of the Terra blockchain, primarily used for stabilizing the value of Terra’s algorithmic stablecoins. While both cryptocurrencies are part of blockchain networks, their primary use cases and target audiences are different.
There isn’t a direct relationship between XLM and LUNA, but they can be compared in terms of their functionalities, market performance, and ecosystems.
Is Terra Better Than Stellar?
Determining whether Terra is better than Stellar depends on the specific use case and individual preferences, as both platforms have their unique features and strengths.
Terra is a decentralized financial payment network that utilizes a basket of fiat-pegged stablecoins, algorithmically stabilized by its reserve currency LUNA, to facilitate programmable payments and open financial infrastructure development. Terra’s primary focus is on maintaining the stability of its stablecoins and facilitating governance.
Stellar, on the other hand, is a decentralized payment network that focuses on enabling fast, low-cost, and efficient cross-border transactions. Stellar Lumens (XLM) serves as the native currency of the Stellar network, used for paying transaction fees and as a bridge currency for cross-asset transfers.
Terra is more focused on stablecoins and decentralized finance, while Stellar is designed for cross-border transactions and asset transfers. The choice between Terra and Stellar depends on your specific needs and preferences.
Conclusion
We hope that you have a better understanding of the differences between LUNA and XLM. Both are great projects, but they have different goals in mind. LUNA wants to become an easy-to-use currency for everyday payments, while Stellar’s focus is on helping banks transfer funds from one country to another quickly and cheaply.
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Author: Redaksi Media
Cryptocurrency Media