Yesterday Thursday, Project Terra, with the goal of improving the efficiency of the global propulsion system, completed the upgrade of the Columbus-5.

The upgrade has major implications for Terra, its UST and its cryptocurrency LUNA, which has surged more than 10,000% this year to become the 11th cryptocurrency by market cap.

The Columbus-5 upgrade could stimulate demand for Terra by opening it up to new networks and decentralized projects.

The deflationary aspect of LUNA should also pump the price further, if all goes according to plan.

The Terra project does not use one cryptocurrency, but two: UST and LUNA

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And what is good for UST is good for LUNA, according to various reasons.

This is because UST is a stable digital currency, and takes advantage of the cryptocurrency LUNA, to maintain a value roughly equal to the dollar.

The digital currency, LUNA, is minted when the demand for UST is low and burned when the demand for UST is high.

The most prominent changes brought by the “Columbus-5” upgrade:

The Columbus-5 upgrade includes several major technological changes to Project Terra.

A notable change and update is the use of burning LUNA to mint the UST stablecoin, as it is no longer transferred to a pool after burning.

The LUNA used to mint the UST will now be permanently burned, as will the current assembly.

This is likely to lead to an increase and an increase in the value and price of the LUNA digital currency, especially in the event of an increase in the volume of UST transactions, which is a possible result after this upgrade, which will lead to more burning of the digital currency LUNA, thus increasing its deflation and thus its price.

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The effect here can be likened to the EIP-1559 of Ethereum.

Another equally important update is Terra’s integration of Cosmos’ Inter-Blockchain Communication (IBC) protocol known as Stargate.

The consolidation means more data sharing between Terra and other Cosmos-integrated blockchains such as Polkadot, Solana, and soon Ethereum.

Stargate integration opens Terra to hundreds of decentralized applications in the Cosmos ecosystem.

Finally, the “Columbus-5” upgrade increases the revenue paid to those who delegate their LUNA to Proof of Stake validators on the Terra network as network contributors will now receive a swap fee generated any time someone trades via the Terra Station wallet app. .

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Previously, these fees were burned.

In conclusion, it is important for crypto investors to remember that UST is a very experimental and even controversial stablecoin, as it is only algorithm-backed, which is an algorithm that uses the fluctuating LUNA value to maintain a fixed price.

These LUNA digital currency optimists – called “LUNAtics” expect LUNA to rise in value because deflationary pressure is making LUNA scarcer.

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