What is Terra USD backed by?

(It has others pegged to different world currencies.) It maintains its peg to the U.S. dollar through a network of arbitrageurs , who buy and sell Terra’s volatile cryptocurrency, LUNA (also, confusingly, known as Terra), which is the seventh-largest cryptocurrency as of March 2022.

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What is Luna for?

LUNA coin is used as a protocol token to reduce the volatility of the stablecoins on the Terra blockchain . It is part of a dual token system with terraUSD: To mint more TerraUSD, the equivalent value of LUNA must be burned. This maintains the stable price of terraUSD and gives LUNA its value.3 Mar 2022

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