Terra network was one of the most successful crypto projects in 2021 with its primary token $LUNA growing more than 2000% during that year and currently capitalizes more than $20.5 billion of the market.
$LUNA, which is also Terra ecosystem’s governance token, is key to keeping Terra’s stablecoins such as $UST steady. Token holders can stake the coin so that they’re rewarded for absorbing the volatility. They receive a percentage of transaction fees from the Terra payment network.
$LUNA holders also gain voting rights. Terra was one of the first crypto ecosystems to introduce algorithmic stablecoins that, as mentioned, are regulated by a token like $LUNA. Based on $UST’s rise to becoming the third leading stablecoin by market cap, the project has proven that this concept for a fully decentralized stablecoin works.
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SEE ALSO: STAKING EXPLAINED – One Clever Way to Earn Passive Income from Your Crypto Holdings
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Here are the steps you can follow if you would like to contribute and earn $LUNA:
Create Account on Terra Station Wallet
Go onto Terra’s website, terra.money, and download the Terra station, the dedicated staking wallet for interacting with the Terra ecosystem.
Here you get a dashboard that will show your current holdings of $LUNA and other tokens on the wallet.
If you do not have any tokens you are holding, send $LUNA to the newly created $LUNA address in your Terra Station wallet. The wallet is the same as other addresses, so all you need is to copy the address.
You can buy $LUNA on exchanges like Binance and Coinbase and then send to your Terra station wallet so you have something you can stake.
Select a Validator
Like most staking blockchains, Terra employs a proof of stake blockchain where validators confirm transactions and other activities to the block.
Validators run the nodes that confirm transactions on the Terra ecosystem where they delegated their own $LUNA. In addition, validators’ ability to earn rewards is correlated to the amount of $LUNA that is delegated.
Terra has many validators with examples such as Staked and Kysen protocol.
Click on Delegate
Once you select a validator, it’s time to delegate.
Enter Amount
Confirm
That’s it!,
You will get a confirmation message declaring the amount of $LUNA you have staked and to which validator.
If you choose to stop staking, there is a 21-day unstaking period to receive your $LUNA tokens. During this period, the unbonding $LUNA can’t be traded and you will no longer receive any staking rewards.
Delegators share the benefits and rewards of staking with their validator. If a validator is successful, its delegators will consistently share in the rewards structure. If a validator is slashed, the delegator’s stake will also be slashed.
This is why delegators should perform due-diligence on validators before delegating. Delegators can also diversify by spreading their stake over multiple validators.
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RECOMMENDED READING: How to Identify and Participate in Airdrops
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