The way crypto investment is viewed by the majority of people has completely changed; especially with the introduction of stablecoins to the crypto world. People who prefer less risky and less volatile investment options are slowly moving away from investing in traditional crypto options like Bitcoin and Ethereum to Luna, Tether, and other stablecoins. Luna, more significantly, has caught the eye of many investors, especially after Terra started rewarding Luna stakers with Airdrops.
Terra is a crypto ecosystem, like other cryptos, runs on a blockchain network. It has launched numerous exciting crypto projects, with Luna being the most notable. While Luna is nowhere near the top digital currencies globally in terms of value, Terra is among the top 5 platforms in terms of transaction volume and indicator of how popular it has become.
If you have recently joined any Terra community forum, you must have noticed “airdrops” is now a frequently used term on them. Luna airdrops are rewards that Terra issues for investing in Luna as well as holding these stable coins. Here is what you need to know about Luna airdrops.
What are Luna airdrops?
Stablecoins like Luna have been created to track the value of fiat currencies or other stable assets such as gold. This means that their value is equivalent to that of the USD dollar in the ratio of 1:1. Terra recently introduced airdrops, which has wholly brought about a new dimension of how investors view stablecoins.
Airdrops in the crypto world are equivalent to dividends in the traditional finance world. Luna airdrops, therefore, can loosely be interpreted as the dividends earned from staking in Luna. The airdrops are issued as additional Luna coins to your existing portfolio. There are various platforms on which you can HODL Luna, with Loop being one of the most popular ones. Here you can stake on Luna and immediately be rewarded with airdrops.
Why are Luna airdrops being issued for free?
The value of any cryptocurrency is determined by its demand. This means that digital currencies will remain valuable as long as more people believe in them. Luna airdrops are issued as an incentive to attract more investors, which sparks more widespread adoption and, consequently, a rise in value and popularity.
It is important to note that the issuance of airdrops is not just for awareness creation. Investors need to realize value from their investments as well. Airdrops will act like interest or dividends from the assets, encouraging investors to hold Luna for a more extended period.
How do I redeem Luna airdrops?
There are several ways in which investors can claim airdrops from various projects and the manner they are awarded differs between each project. In most cases, the airdrops are directly dropped into your wallet (as in the case of Luna). When you stake on Luna, you earn weekly airdrops, which you can redeem as profits or leave them in your account as they will increase the value of your investment.
How to earn higher airdrop rewards from Luna?
Many people wonder whether it is possible to compound your airdrop rewards with your principal for an even bigger reward, and the simple answer is yes. When you compound your airdrops, you can earn a greater yield. Airdrop rewards can range between 10 and 14%, and you can imagine how valuable the compounded figure will be when your investment matures.