Terra’s Stablecoin-Based Payment Platform Raises $32 Million Seed Round
Terra, a blockchain-based stablecoin payment platform founded by Daniel Shin, the founder of TicketMonster, has raised a $32 million seed round led by a group of prominent crypto exchanges, including Binance, OKEx and Huobi Global. The funds will be used to launch a stablecoin, also named Terra, as the main currency for the new payment platform.
According to a recent report by Tech In Asia, the South Korea-based startup aims to become the blockchain replacement of current payment platforms like PayPal and Venmo. To achieve this, Terra has introduced a dual-token system that includes Terra, the stablecoin, and Luna, the collateral token that derives its value from transaction fees collected on the Terra network. This system should reduce the volatility relative to the trading pairs of other stablecoins by introducing a decentralized stability reserve.
To control the price of Terra, which fluctuates as a function of demand, the startup will print Terra to lower the price when it hikes and leverage a stash of Luna coins to purchase and burn Terra to drive up the price when it drops. Together, this system will work to maintain solvency in the ecosystem
In a statement accompanying the report, Shin emphasized that simplicity in use is a central element to the future adoption of the Terra platform.
We strongly believe that paying with cryptocurrencies shouldn’t be different from any other checkout experience, if not more convenient. We are designing our product so that when people select Terra as a payment option at checkout, they won’t even realize that they are paying with cryptocurrencies.
A number of ecommerce platforms have already joined what is called the ‘Terra Alliance,’ a group of companies that offer Terra as a payments option on their sites. Shin claims that the Terra Alliance already has 15 global partners, with 40 million customers and $25 billion in annual sales between them.
Several blockchain-focused venture capital firms also joined the massive seed round, including Polychain Capital, FBG Capital and Hashed.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.