Yet another stablecoin is joining the arguably already crowded ecosystem. Terra, as the new fiat-pegged crypto is called, counts four of the biggest cryptocurrency exchanges in the world among its investors, including Binance, Okex, Huobi and Upbit.
Terra has announced today it raised an initial $32 million in its seed funding round which included Binance Labs, Okex, Huobi Capital, and Dunamu & Partners (the investment firm of Upbit operator). Other than exchanges, Polychain Capital, FBG Capital, Hashed, 1kx, Kenetic Capital, Arrington XRP Capital and Translink Capital also took part in the seed round. The capital is meant for creating a stablecoin that can be used as a payment solution.
Fears about the dependability of Tether (USDT) have led to а torrent of new stablecoins recently, such as the Stronghold USD and Stasis EUR, and more are on the way. Terra is trying to carve a space for itself by focusing on ecommerce integration. Its co-founder, Daniel Shin, is the founder and Chairman of TMON, an ecommerce platform from South Korea. And fifteen companies, with a total of $25 billion in annual transaction volume and 40 million customers (including Woowa Brothers, Qoo10, Carousell, Pomelo, and TIKI), have joined the Terra Alliance. The stablecoin is said to be backed by Luna, an asset that derives its value from transaction fees collected on the network. “Much like the moon stabilizes the earth’s rotation, Luna is Terra’s eternal guardian of stability.”
Is There a Need for Another Stablecoin?
“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,” said Shin. “However, our vision goes beyond positioning Terra as a trusted and secure medium of exchange for ecommerce. 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.”
“While we see many stablecoins 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,” commented Ella Zhang, Head of Binance Labs.
Is there a place in the market for so many new stablecoins? Share your thoughts in the comments section below.
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