Fantom’s Partnership with Terra Brings us One Step Closer to the Mass Market
A next-generation payment platform requires next-generation payment systems. To this end, we’re happy to announce our new partnership with Terra: a decentralized stablecoin centered upon ecommerce currently pegged to SDR (Special Drawing Right). Together, we’re bringing blockchain-based payments to both online platforms and offline retailers.
What is a stablecoin?
First, let’s talk about stablecoins. Stablecoins are cryptocurrencies that are pegged to real-world assets. A classic example is USDT, or Tether, which is pegged to the US dollar. This gives them a stable value — and, for this reason, they’re regarded as a necessary precursor to the mass market adoption and integration of cryptocurrencies. Markets don’t like volatility; stablecoins allow retailers to access the benefits of cryptocurrencies, introducing them as a form of payment, without incurring additional risk.
The flip side to stablecoins is that they’re usually centralized: the assets to which they’re pegged are, as with fiat, centrally monitored, regulated, and ultimately controlled by intermediate entities (banks, governments, etc.). In addition to the security risk this creates, stablecoins pegged to centralized stores of value belie the promise of blockchain technology.
So what about Terra?
Terra is different; an iteration, if not an innovation, to the original stablecoin concept. Terra is a decentralized SDR-pegged stablecoin that maintains its value by taxing value created within its network — similar to fiat — and operates under a decentralized guarantee of solvency by a maintained, decentralized full reserve, achieved through the Terra Protocol. SDR is an international reserve asset with a value based on a basket of five different currencies: USD, GBP, the Euro, the Chinese renminbi, and the Japanese yen. Though Terra will at first mirror the SDR basket, it will in fact extend beyond it, with plans to later include basic goods, gold, and other physical assets.
What the partnership means
By collaborating with Terra, we’re not only building the Fantom Enterprise Alliance, but offering retailers additional choice in how they implement and leverage cryptocurrency payments.
Through us, Terra will be able to expand the use case of the Terra stablecoin; through them, we’ll be able to offer developers and dApp consumers with a reliable method of payment.
Mass market adoption partly depends upon the network effect: the more ecommerce retailers offering cryptocurrency payments, the more cryptocurrencies are transacted, which in turn attracts additional retailers, which in turn helps build credibility and trust. It’s a circle; we just need to get the wheels spinning. Combining our ecommerce partners with Terra’s allows is to accelerate this process, expanding across more industries, building legitimacy, and increasing the real-world usability of cryptocurrencies.
Mass market adoption isn’t far off, and every step brings us closer.
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