Terra Luna Crypto Token Emerging as Ethereum Defi Challenger

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Terra Luna (CRYPTO:LUNA) could be a great opportunity for long-term growth investors after the recent correction in the cryptocurrency sector. Here’s the low-down on the LUNA crypto and its potential to disrupt the global financial sector.

Terra Luna’s background

Launched in 2019 by Stanford graduates Do Kwon and Daniel Shin, Terra Luna was initially intended to disrupt Asia’s e-commerce market with blockchain technology. The continent already accounts for roughly 57% of global online shopping. According to recent estimates, online sales in the region are worth over $2 trillion. So, Terra Luna had grand ambitions from the start.

These ambitions have expanded in recent years. Terraform Labs, the company behind the LUNA crypto platform, now wants to disrupt all of global finance. The platform allows blockchain developers to create and launch decentralized financial (DeFi) products to address specific market needs. So far, creators have launched stablecoins, decentralized loans, and non-fungible tokens (NFTs) within the Terra Luna ecosystem.

LUNA products

The flagship product on the Terra Luna ecosystem is a stablecoin pegged to the U.S. dollar. The Terra Dollar, or UST, is the fourth-most popular stablecoin after Binance USD, Tether, and USDC. This token facilities cross-border trade and online shopping. In just two years, the platform has gained incredible traction.

This year, Terraform Labs said it had 15 commercial e-commerce partners. These firms attracted a total of 45 million active users and handled gross merchandise volume (GMV) of over US$25 billion (CA$31.7 billion) since inception. In other words, Terra Luna is a legitimate challenger to traditional e-commerce giants.

The team is now working on expanding the ecosystem. Last year, they launched several new stablecoins, including TerraCNY, TerraJPY, TerraGBP, TerraKRW, and TerraEUR. In December 2021, DeFi products on the Terra Luna ecosystem held US$20 billion (CA$25 billion) in assets altogether, making it the second-largest DeFi platform after Ethereum.

The success of these products indicates that Terra Luna could have a shot at disrupting Ethereum and the multi-trillion-dollar DeFi market in the years ahead.

Addressable market

At the time of writing, Terra Luna is the ninth-largest digital asset in the sector. The value of all LUNA crypto tokens in circulation is $30 billion. That’s a fraction of the market opportunity ahead of it.

Online shopping is a $5.5 trillion global industry today. By 2025, that’s expected to hit $8.1 trillion. DeFi is much smaller but is growing faster. The revenue generated by DeFi protocols in 2021 exceeded $6 billion. Meanwhile, financial products such as retail banking, cross-border payments, and stock trading generate annual revenue ranging from $3 trillion to $40 trillion globally.

Put simply, Terra has a long runway for growth ahead of it. At $30 billion, the ecosystem is basically the same size as a small social network. If it grows to be the size of a multinational bank or well-funded FinTech giant, it could be worth 10 times more.

Bottom line

Terra Luna is quickly emerging as an Ethereum challenger with significant traction. If this pace of growth continues and DeFi remains popular, this crypto token could be a multi-bagger in the years ahead.

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