With a ton of options to look into, from crypto giants like Bitcoin and Ethereum to altcoins such as Cardano and Ripple, you are spoilt for choice in the cryptocurrency world. What’s even better is that getting your hands on the crypto coin of your choice is only a few clicks away. If, among the myriad options, the specific coin you may want to invest in is TerraUSD (UST), this guide is all you need.
Read on to learn everything you need to know about the Terra network and how to buy TerraUSD (UST) in a few simple steps. As with any other cryptocurrency, the process is straightforward.
Why Choose TerraUSD
TerraUSD (UST) is the decentralized, scalable, yield-bearing, and algorithmic stablecoin of the Terra blockchain, offering a wide range of features. Its value is pegged at 1:1 to the US dollar, making it an ideal medium of exchange and a scalable solution for DeFi projects. UST can also be used in conjunction with LUNA, Terra’s non-stablecoin crypto.
TerraUSD launched in September 2020 in partnership with Bittrex Global aiming to create a scalable stablecoin pegged to the US dollar. Terra, TerraUSD’s native blockchain, is a brainchild of Terraform Labs, a subsidiary of the Terra Alliance that consists of 16 e-commerce companies. Do Kwon and Daniel Shin are co-founders of Terra (LUNA). Do Kwon is the CEO of Terraform Labs. He is a former software engineer at Microsoft and Apple and served as CEO of Anyfi, a startup providing decentralized solutions for wireless mesh networks. Kwon is included in the Forbes 30 Under 30 list of the world’s most successful entrepreneurs.
Co-founder Daniel Shin is a talented economist and entrepreneur. Before Terra Alliance, he co-founded Fast Track Asia, a startup incubator, and TMON (Ticket Monster), a South Korean e-commerce platform.
The Terra ecosystem also has a Korean Won pegged stablecoin TerraKRW, which launched before TerraUSD. TerraUSD was made available on the Ethereum and Solana blockchains through the Dropship platform.
So What Makes TerraUSD (UST) Unique
Enhanced Scalability, Easy Exchange, Passive Income Potential, and Interoperability are the important aspects that make TerraUSD UST unique.
Enhanced Scalability – TerraUSD is an algorithmic stablecoin with a value equal to the face value of minted stablecoins. To issue 1 TerraUSD, you need to burn 1 LUNA reserve asset.
Easy Exchange – The stablecoins in the Terra ecosystem share the total liquidity, meaning you can exchange TerraUSD for TerraKRW with minimal fees.
Passive Income Potential – Users can gain passive income using the Anchor yield service’s stable interest rates of a 20% return on UST savings. They can also gain income through rewards in PoS chains, where miners must stake the native Terra’s LUNA token to mine Terra transactions.
Interoperability – TerraUSD allows linking blockchain ecosystems through the Dropship bridge protocol. Dropship integrates TerraUSD into DeFi platforms and DEXs and also moves assets between blockchains. It also guarantees the stable value of UST since LUNA’s supply and demand determine the value of TerraUSD.
Long Term Rewards for Mining
The technology behind TerraUSD aims to detect and adjust deviations in the price. Stability is mainly possible by contracting or expanding the money supply. Since miners play a vital role in maintaining stability, the TerraUSD protocol strives to provide stable rewards in all economic conditions.
Possibilities for Development
With a platform that’s already growing exponentially, more developments are expected in the long term. This includes further integration across more apps. Those who have an eye on future investment opportunities can expect some substantial rewards down the line.
Backing by Luna
The support that TerraUSD receives from LUNA guarantees that its value will remain stable compared to the US dollar.
Where to Buy TerraUSD
Several cryptocurrency exchanges allow you to trade TerraUSD. When choosing a platform to buy or sell TerraUSD, you should compare their features, such as transaction fees, supported fiat money, customer support, user-friendliness, etc. You might also seek the cheapest way to buy TerraUSD. Also, consider if the cryptocurrency exchange allows you to buy UST with your preferred deposit methods, such as a credit or debit card, other cryptos, or a bank transfer.
Consider that you can’t buy UST directly on some exchanges; instead, you need to buy Bitcoin/Ethereum first and exchange it later to TerraUSD.
Coinbase exchange, for instance, supports over 20 fiat currencies, including USD, EURO, DKK, CAD, and GBP. You need to register a Coinbase account and download the Coinbase Wallet to buy the UST token. You can then choose your preferred currency and payment method, such as a bank transfer, credit or debit card, PayPal, Wire transfer, or Apple Pay.
Follow our step-by-step guide below to buy TerraUSD.
How to Buy TerraUSD
Step #1: Create an Account
Once you’ve selected a reliable cryptocurrency exchange, you can move on to creating your account to buy TerraUSD. The requirements differ depending on the platform you pick. Personal information such as your name, contact number, e-mail address, home address, social security number, and a copy of your driver’s license, passport, or government-issued ID will be required for most transactions. You might also need to identify yourself through a webcam or smartphone in compliance with Know Your Customer (KYC) rules if you plan to deposit fiat money from your bank account to purchase the UST token.
After verifying your ID, you may want to enable the two-factor authentication system (2FA) to add an extra layer of security to your account.
Step #2: Fund Your Account
After setting up your account, the next step would involve depositing funds to purchase TerraUSD and other cryptocurrencies. You can use your bank account, debit/credit card, or crypto coins from a different crypto wallet. The payment method you use will be determined by the platform, location, and preferences.
Linking your debit card to your crypto account is advantageous as it lets you make instant or recurring purchases, but be aware that it may involve an additional fee. In the case of a local bank account, transfers are generally free, but you may want to double-check with the platform you are using.
TerraUSD can also be traded for other cryptocurrencies like Bitcoin, Ethereum, or stablecoins. The trading pairs vary between exchanges, so you will need to search for TerraUSD on the spot market to select a pair from the list of available currencies.
Step #3: Buy TerraUSD
Once your account is funded, you can now buy TerraUSD. Most centralized and decentralized exchanges offer an “instant buy” option that lets you purchase UST easily for a set price. An alternative way involves opening a trade in the spot market and setting your own price. Although the “instant buy” method is relatively straightforward, it tends to be more expensive than the spot market option. It’s also good to check the market conditions and recent performance to see if it’s the appropriate time to buy TerraUSD before going ahead with your purchase.
Step #4: Secure Your TerraUSD
After buying your UST coins, you can either keep them on the exchange or store them in a personal crypto wallet. We highly recommend creating a private wallet with your own set of keys and complete ownership over your crypto assets. Depending on your investing preferences, you might choose between software and hardware wallets, the latter being a more secure choice.
A hardware wallet is usually considered the most secure wallet to store your digital assets as it offers offline storage, thereby significantly reducing the risks of a hack. Hardware wallets are secured by a pin and will erase all information after many failed attempts, preventing physical theft. They also let you sign and confirm transactions on the blockchain, giving you an extra layer of protection against cyber attacks. Simply install the wallet on your laptop or desktop and manage your assets safely.
Of course, online or software wallets are also available in case you prefer a more digital approach. The strength of software wallets lies in their flexibility and ease of use. They let you interact with several decentralized finance (DeFi) applications quite easily. However, these wallets are vulnerable to security leaks because they’re hosted online. So, if you want to keep your private keys in software wallets, conduct due diligence before choosing a wallet to avoid security issues. We recommend a platform that offers 2-factor authentication as an extra layer of security.
What to Consider Before Buying TerraUSD
It’s important to evaluate risks as well as potential swings before making any crypto purchase. There are several factors to consider regarding your UST purchase, including competition, price peg, and compatibility.
Stablecoins play a significant role in the cryptocurrency world, with TerraUSD being in direct competition with TetherUSD and USD Coin, which have a fair share in the stablecoin market. While there is a lot of competition in the stablecoin space as new projects are being launched frequently with new and advanced features, the factor that differentiates UST from its competitors is its interoperability. Another advantage of UST is that it’s a decentralized stablecoin. Notably, UST overtook DAI in 2021 to become the largest decentralized stablecoin by market capitalization.
TerraUSD is programmable money for the internet. The total supply of UST is uncapped. As users purchase UST, more coins are minted and put into circulation. Similarly, when the users sell UST, tokens are burnt, reducing the circulating supply.
However, buying a stablecoin is not the same as investing in volatile cryptocurrencies, as you can’t expect the token’s value to increase significantly over time. The TerraUSD is fixed at $1 and is mainly useful for getting access to lower transaction fees and staking, as well as avoiding volatility. Additionally, UST has the advantage of being scalable and interoperable due to the Dropship bridge. Its compatibility with new and existing DeFi platforms is vital for the continuity of Terra’s success.
How to Sell Your TerraUSD Coins
After having bought UST, you have the option of selling it on the same platform. Simply sign in to the platform you used to purchase your TerraUSD, place an order by selecting the amount of UST you plan on selling, and finalize the sale by confirming the price and the transaction fees. In case you happen to keep your UST in a digital wallet, consider comparing exchange platforms where you can cash it out.
In conclusion, TerraUSD is a stablecoin with distinct advantages such as mining rewards, etc., and a lot of potential. The process of buying UST is generally straightforward. Before buying UST, the few factors to keep in mind are competition with other stablecoins, the $1 price peg, and compatibility with DeFi services.
While investing in TerraUSD certainly does have its perks, it’s also essential to bear in mind the risks it entails. You can always do more research on CoinStats, if you want to go beyond this article.
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