Disclosure: Delphi Ventures and members of our team hold positions in LUNA. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase LUNA. This is not investment advice.

This is a follow-up post to our initial Terra report from February 2nd.

External and Internal Shifts In Wealth

Money is purely a nominal asset. When new money is minted (i.e. printed) or burnt, wealth is not necessarily created or destroyed. Supply changes in money only make one richer or poorer if the new distribution ends up being different than the original. Even in this case, the shift in wealth is completely internal to the owners of that particular currency. The total wealth of currency holders does not change, only the wealth of each holder, relative to one another, does. True shifts in wealth only happen due to changes in demand. It’s evident that Terra’s team understands this principle given their focus on sourcing fundamental demand for their family of stablecoins, both from within and outside crypto. 


Capital Efficient & Crypto Native Stablecoin

Compared to the existing alternatives illustrated in the chart below, Terra’s stablecoins do not rely on fiat backing or over collateralization to maintain their price peg or grow supply. The demand to supply Terra stablecoins is completely aligned with the demand to use it and therefore the Terr

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