10 Questions
What is tokenomics?
The set of principles and rules that govern the design, distribution, and use of a cryptocurrency
What document outlines tokenomics?
A white paper
What is TerraUSD?
A stablecoin
How is TerraUSD kept close to $1?
By arbitrageurs trading it for LUNA
What kind of opportunities does the tokenomics system create?
Low-risk gains
What is the purpose of a white paper?
To explain the proposed cryptocurrency and how it and any underlying technology will work
What is the purpose of arbitrageurs in Terra’s ecosystem?
To keep the price of UST as close to $1 as possible
What color paper outlines tokenomics?
White
What type of asset is TerraUSD?
Stablecoin
What is used to keep the price of UST close to $1?
Arbitrageurs trading it for LUNA
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 of tokenomics, the principles and rules governing the design, distribution, and use of cryptocurrencies, often outlined in a white paper. Explore how stablecoins like TerraUSD (UST) rely on arbitrageurs to maintain price stability, appealing to investors for low-risk gains through arbitrage trading.
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