The Terra blockchain, which aims to increase the efficiency of the global payment system, was upgraded this Thursday. The upgrade to Columbus-5 required shutting down the old chain and switching to a new one.
Terra’s DeFi ecosystem is likely to develop as a result of the update. By introducing DeFi apps and interoperability with Solana and Polkadot, Columbus-5 is intended to expand its ecosystem.
When the number of UST increases, all LUNA generated will be burned, similar to how Ethereum’s EIP-1559 upgrade burns ETH with each transaction. The Cosmos’ IBC integration will allow for interoperability with other IBC-compatible blockchains.
Unlike Ethereum’s upgrade, during the Terra blockchain’ shift to Columbus-5, the old chain was shut down, and the code migrated to a new chain from the state of the last block.
The Terra blockchain is a decentralized and open-source blockchain that is built to provide a stablecoin. The platform provides monetary stability and reduces transactional fees. The Blockchain for Stablecoin launched as a chain on Cosmos offers a step-change for those looking to use cryptocurrency as a medium of exchange. Furthermore, it also enables global payments and support across multiple blockchains, with each wallet acting as its own “bank”.
Terra’s operations are based on two major components: the LUNA utility token and Terra stable coins. Its stablecoin shares some similarities with other blockchain-based stable coins. It is backed by a seigniorage process to maintain price stability and does not rely on fiat currency reserves.
The Columbus-5 update is a major update to the network that will increase the reward to users who delegate their LUNA to proof-of-stake validators. And it is now set to pay out swap fees to those contributing to the network anytime someone trades using the Terra Station wallet app.
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