Binance Labs, Major Crypto Exchanges Back $32 Million Terra Stable Coin Project
Terra, a project designing a price-stable digital currency that will power the next-generation payment network on the blockchain, has successfully closed its seed funding round with an initial USD $32M.
In a rare event, the capital investment arms of four of the six largest cryptocurrency exchanges globally have signed on as lead investors, including Binance Labs, OKEx, Huobi Capital, and Dunamu & Partners (the investment firm of Upbit operator Dunamu).
An impressive list of leading global blockchain-focused funds, including Polychain Capital, FBG Capital, Hashed, 1kx, Kenetic Capital, Arrington XRP Capital and many others, have also joined as investors alongside major mainstream funds like TransLink Capital.
Co-founded by Korean entrepreneur Danial Shin, who founded and chairs TMON, one of the top e-commerce websites in South Korea, the Terra project is launching with a significant number of partners that already reach 40 million customers. Those partners, who will together form the Terra Alliance, a group of e-commerce sites that are interested in incorporating the stable coin into their business, include Woowa Brothers, Qoo10, Carousell, Pomelo and TIKI.
“From experience, I know that faster, more secure transactions at a fraction of today’s fees could be a game-changer for many eCommerce platforms. We are excited to be working with great partners and look forward to beta-testing Terra’s payment system in Q4 of this year,” explained Daniel Shin, Co-founder of Terra. “However, our vision goes beyond positioning Terra as a trusted and secure medium of exchange for e-commerce. The potential application of Terra is immense, and we foresee it being used for all types and forms of financial products like loans and insurance.”
Terra was conceived in response to the need for a stable digital currency that is immune to the price volatility that comes with speculation and manipulation.
According to Shin, Terra coins will be backed by “a decentralized stability reserve” comprising a second cryptocurrency.
“Terra uses a dual-token system, which is composed of Terra – the stable coin – and Luna, the collateral token,” he explained. “When demand and price of Terra goes up, we can print more Terra to bring the price back down.”
Some of this new supply will be returned to users in the form of discounts, giving them an incentive to pay with Terra.
“On the other hand, when demand goes down and the price of Terra drops, we need to be able to buy back Terra and burn it,” noted Shin.
The startup will use its stash of Luna coins to purchase Terra in order to maintain solvency in the ecosystem, he said.
However, creating a widely accepted digital currency is only part of its mission. Beyond being a currency, Terra hopes to evolve into an open platform where innovative financial dApps can build upon Terra’s stability. In finally bridging the gap between digital currencies and real-world application, Terra will help unleash the vast and yet-to-be-realized potential of blockchain to revolutionize the very nature and form of money.
“While we see many stable coins coming out, Terra’s journey is especially meaningful as they are designing one of the few price-stable protocols with existing, working, and strong go-to-market strategy and usage. We are constantly impressed by the founders’ leadership and earnest commitment to the business, and excited to support the team,” said Ella Zhang, Head of Binance Labs.
Subscribe to our Newsletter<
- Binance Adds Support for Circle’s USDC Stablecoin
- Swiss Firm Obtains Sharia Compliance Certificate for Ethereum-based Stablecoin
- Coinbase Deny IPO Rumors as Crypto Giant Closes $300 Million Series E
- Goldman Sachs and Mike Novogratz’s Galaxy Digital Invest in Cryptocurrency Custodian BitGo
- Fidelity to Provide Enterprise-Grade Digital Asset Solutions for Institutional Investors
- Price of Tether USDT Plummets to 18-Month Low as OKEx Adds Four Stable Coins
- Leading U.S. Universities Invest in Cryptocurrency Funds
- Crypto Trading Platform Caspian Raises $16 Million in Token Pre-Sale