Terra is an algorithmic stablecoin platform that runs on the Proof of Stake (PoS) built with Tendermint, which is the bottom layer of the Proof of Stake blockchain.
LUNA is Terra's platform token, which is used for the issuance of stable coins (TerraSDRs), price stabilization mechanism, and network governance.
Users can exchange LUNA tokens for TerraSDRs stablecoins and vice versa. The price stability of such stablecoins is guaranteed.

Luna is the mining coin of the Terra DPoS blockchain, and Terra is powered by Luna. Thus, miners provide stability and security. On exchanges, the protocol provides stable mining rewards under all economic conditions with transaction fees and seigniorage.

Terra is designing a price-stable digital currency that will power the next generation of blockchain payment networks. Terra has established a global e-commerce alliance with continuous growth of users, bringing the low-cost advantages of blockchain transactions to merchants and consumers. Terra's goal is to connect digital currency and practical applications, grow into an open platform for innovative financial decentralized applications (dApps), and achieve real growth in the blockchain economy. Terra was founded by a group of business, finance and blockchain technology experts with offices in Singapore and South Korea.

The price stability mechanism of the Terra system relies on the arbitrage behavior of users. For example, when TerraKRW, a stablecoin against the South Korean won, falls to 0.95:1.00 in Korean won, users can use 95 won cryptocurrency to get 100 TerraKRW on the trading platform, and then exchange it to the Terra platform to get 100 won LUNA tokens. If the price of TerraKRW exceeds 1 won, users can exchange TerraKRW with LUNA tokens and sell them on the trading platform for profit.
The Terra platform hopes to reward network maintainers with predictable rewards regardless of the economics of the network. Terra uses transfer fees and LUNA token burns to hedge against changes in unit rewards.