Is Terra Luna a Layer 1 blockchain?

Terra, a DeFi-centric layer-1 protocol built using Cosmos , has also rebounded by nearly 12% after a brutal week which resulted in LUNA, the network’s native token, shedding nearly 20%. LUNA’s gains appear to revolve around returning trust in the network’s U.S. dollar-pegged stablecoin.1 Şub 2022

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Is Terra a Layer 1?

Terra is a Layer 1 smart contract blockchain built for stablecoins . Unlike other Layer 1 networks such as Ethereum, Terra focuses on creating an ecosystem for real world payments. To achieve this, it uses algorithmic decentralized stablecoins that track the price of traditional fiat currencies.

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What is a Layer 1 solution?

Layer 1 refers to a base network, such as Bitcoin, BNB Chain, or Ethereum, and its underlying infrastructure . Layer-1 blockchains can validate and finalize transactions without the need for another network. Making improvements to the scalability of layer-1 networks is difficult, as we’ve seen with Bitcoin.

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Is Luna a utility token?

While Terra’s stablecoins ensure seamless transactions and the stability of fiat currencies, the Terra crypto network uses its native LUNA currency as a utility and governance coin to operate the collateralizing mechanisms that back and secure the price stability of the Terra network’s stablecoins.

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