10 Questions
What is tokenomics?
The set of principles and rules that govern the design, distribution, and use of a cryptocurrency
What is a white paper?
A detailed document explaining the proposed cryptocurrency and how it and any underlying technology will work
What is TerraUSD?
A stablecoin in Terra’s ecosystem
What is the goal of TerraUSD?
To keep the price of UST as close to $1 as possible
What is LUNA?
A network of arbitrageurs who swap UST with another of Terra’s tokens
What is the purpose of the arbitrageurs in the TerraUSD tokenomics system?
To keep the price of UST as close to $1 as possible
What is the main benefit of the TerraUSD tokenomics system?
To make low-risk gains through arbitrage trading
What is the goal of the TerraUSD tokenomics system?
To keep the price of UST as close to $1 as possible
What type of document outlines tokenomics?
A detailed document explaining the proposed cryptocurrency and how it and any underlying technology will work
What type of gains are possible through the TerraUSD tokenomics system?
To make low-risk gains through arbitrage trading
Study Notes
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Tokenomics is the set of principles and rules that govern the design, distribution, and use of a cryptocurrency.
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Tokenomics is often outlined in a white paper, which is a detailed document explaining the proposed cryptocurrency and how it and any underlying technology will work.
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One of the main stablecoins in Terra’s ecosystem, called TerraUSD (UST), relies on a network of arbitrageurs, who swap UST with another of Terra’s tokens, LUNA, to keep the price of UST as close to $1 as possible at all times.
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This complex tokenomics system appeals to investors because it creates accessible opportunities to make low-risk gains through arbitrage trading.
Test your knowledge about the principles and rules governing the design, distribution, and use of cryptocurrencies, as well as the role of stablecoins and arbitrageurs in maintaining price stability.
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