> ## Terra and Luna > > Because the primary value of stablecoins is derived from the stability of the price peg, theoretically bypassing the volatility typical of cryptocurrencies, the Terra protocol attempts to maintain the price of the Terra stablecoin by ensuring that the supply and demand for it are always balanced by employing arbitrage.1 > > Luna is the variable counterweight to the Terra stablecoin and absorbs its volatility. To understand how Terra works, envision the entire Terra "economy" to consist of a Terra pool and a Luna pool, which are used to adjust the price via incentives for network participants. > > ### Terra > > These are stablecoins that track the price of fiat currencies and are named after them. For instance, the base Terra stablecoin tracks the price of the International Monetary Fund's Special Drawing Rights and is named TerraSDR or SDT. Other Terra stablecoin denominations include TerraUSD (UST), which tracks the U.S. dollar, and TerraKRW (KRT) which tracks the South Korean won. Users mint new Terra by burning Luna.71 > > ### Luna > > Used for governance and mining, Luna is the Terra protocol's staking token, which absorbs the price volatility of Terra stablecoins. Users stake Luna to Terra blockchain miners (called "validators"), who record and verify transactions on the blockchain and receive rewards from transaction fees as compensation. As Terra usage grows, Luna's worth increases as well.1

What is a circulating supply?

A cryptocurrency circulating supply refers to the number of tokens in circulation in the market at any given time that are available for trade.

The circulation supply metric is used to define the market capitalization of a given cryptocurrency and accounts for the size of its economy. A cryptocurrency’s market cap is obtained by multiplying the price per unit by the number of all the existing coins in a blockchain, even the ones that have been lost or confiscated.

Somewhat emblematic is the example of Bitcoin and its creator, Satoshi Nakamoto, who mined millions of BTC in the early years but never moved them. Whatever the reason behind such a decision, all those Bitcoin are still included in the total circulating supply of the cryptocurrency.

There is a sub-metric of market cap, denominated realized market cap, which calculates the price of a coin when it was last moved as opposed to the current value. Realized market cap does not include coins that have been lost or are dormant in a blockchain, reducing their impact on the price.

Some cryptocurrencies, like Bitcoin, have a finite supply, and their circulation is only increased through mining. On the other hand, developers of some more centralized tokens can increase their circulation supply through instantaneous minting, a bit like central banks.

Circulation supply can also decrease by a process called burning, which means destroying the coins by sending them to a wallet whose keys are not available to anyone. For this reason, the circulation supply metric should be considered somehow approximate.

What is a total supply?

A token’s total supply is calculated by adding the circulating supply to the number of coins that have been mined but not yet distributed in the market.

In the case of coins reserved for staking rewards, for instance, they have already been minted. Still, they are locked up in the project’s protocol and are only distributed when the staker meets a particular condition.

Another instance occurs when a new cryptocurrency project is launched, and the number of tokens issued is not equal to the one being distributed. These types of measures are usually taken to follow demand and not oversupply a cryptocurrency that could, as a result, affect the price negatively.

It could also be the case of tokens created by developers at a blockchain’s launch as premine to use as development funds but have not been circulated yet. Moreover, burned coins or tokens are not calculated in the total supply, as they are tokens sent and permanently locked up in a burned address that nobody will ever be able to access and are therefore eliminated forever.

It is possible to increase the total token supply, depending on the crypto protocol’s rules. With Bitcoin, for instance, unless there is maximum consensus to change the protocol, its total supply of 21 million coins can’t ever be changed. With other tokens, developers could potentially change a protocol’s supply rule by planning in advance a variable in the smart contract.

By chains

The "Axelar" has the maximum share in terms of active users. The "Kujira" is the next one.

All of the other networks have been shown, and the number of each network has been determined.

The trend of this metric shows a strong start, and the number of active users is more than ==1200== (May ==29==), but this stream dropped significantly after a couple of days.

After the beginning days, the new users chart experienced a steady state approximately, and now the number of new users is less than ==50==!

The "Daily Luna "Bridged out" volume by chains" is also investigated in this section.

Evidently, a strong start can be seen at the start of this metric.

On ==30th== May, the amplitude of this metric was more than ==80K==!

The share of each chain has been detected and showed also.

At first, "Axelar" has great dominance in this index. On some days, all of the "Bridged out" volume belongs to the "Axelar" chain!

But the share chains changed over time.

Clearly, the share of "Kujira" has greatly changed over time.

Another point is that the general stream of this index hasn’t any special trend and has indeterminate fluctuations.

In the chart above we see the percentage of Luna IBC-ed out of the market, the highest number you can easily guess is for 05,09,2022 with 12.7% transfer and then next week it is 8.52. % and as the market progresses, this number decreases but is still strong.

When it comes to sales, it's a different story because the numbers are really big. On June 13th when you saw there was only one transaction, 100k Lunas were sold in just one transaction. And then you can see the highest point on October 17th when 18B Lunas were sold on the blockchain. Before that you see the 17B Lunas sold. From these numbers you can guess that it is true that there are fewer transactions, but those traders are less convinced that this Luna will skyrocket, that's why they bought a lot of Lunas.

Conclusion

A total of 195.7 thousand shares have been traded in TERRA since its launch

A total of 172 unique validators have participated in betting actions since launch

Since the launch of TERRA, a total of 62.3 thousand unique agents have placed one or more betting actions.

Daily charts behave similarly except for the quantity. All of them had peak days in the early days of blockchain startups, went down, and then maintained that momentum. A significant increase date for all metrics was on September 9th and 10th

By the number of betting transactions, shareholding had the highest volume of transactions, along with the number of agents and validations.