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Terra Luna Vs. Fantom (Explained)

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This article was written before the Luna Crash.

Terra and Fantom are two of the best breakout crypto coins. Each one has unique features and mechanisms. They also serve different purposes and aim to solve complex problems in the crypto market.

Here, we take a look at both coins, their features and how you can use them.

What is Terra (LUNA)?

Terra is a programmable blockchain that allows users to create stablecoins pegged to fiat currencies such as the U.S. dollar.

Terra also aims to become a global payment alternative by providing a secure, practically frictionless cross-border payment capability that is faster and cheaper than many other payment apps.

The platform’s native cryptocurrency is LUNA, which has three key purposes.

Staking LUNA allows users to receive rewards and participate in the governance process by voting on new proposals and ideas.

Besides that, the Terra blockchain is ideal for Terra stablecoin savers, stakers, traders, and exchanges.

Terra runs various stablecoins, including TerraUSD (UST), TerraEUR, TerraGBP, and others. You can swap these stablecoins for one another.

When the demand for TerraUSD and other stablecoins grows because of increased transactions volumes,  Terra algorithmically mints more LUNA tokens to maintain price stability. 

Terra automatically buys more LUNA and burns the remaining stock when the network’s payment transaction volume drops.

Learn more: Is Terra Luna A Smart Contract Platform?

Advantages of Terra (LUNA)

  • Terra is more available to dApps because of the Cosmos SDK technology.
  • Allows for quick, low-cost cross-border payments that are competitive with traditional payment systems.
  • Terra’s stablecoins are interoperable with other blockchains.
  • Stablecoins’ unique algorithmic basis is self-sufficient and fully decentralized.

Learn more: Terra Luna Vs. Cosmos

Disadvantages of Terra (LUNA)

  • Terra’s long-term adoption raises concerns.
  • The algorithmic framework may potentially be a source of flaws.
  • Terra may be subject to regulatory surveillance and investigation.

What is Fantom (FTM)?

Fantom (FTM) is a decentralized, open-source platform for smart contracts. It allows users to create decentralized apps (dApps) and other types of digital assets.

It uses the robust Lachesis consensus mechanism, a proof-of-stake consensus mechanism.

It’s also one of many blockchain networks designed as a speedier, more efficient alternative to Ethereum.

Fantom’s programmable blockchain supports a wide range of DeFi assets. Its unique architecture and consensus mechanism are among the few top contenders for solving the crypto trilemma of scalability, security, and decentralization. 

Every node in Fantom uses a directed acyclic graph (DAG). As a result, nodes can independently confirm transactions. Confirmed batches get combined into finished blocks, which undergo confirmation on the Fantom network. 

Advantages of Fantom (FTM)

  • Fantom has a one-of-a-kind incentive program geared for builders rather than users.
  • Strong capabilities: It has rapid transaction speeds, near-instantaneous finality, and cheap costs.
  • FTM coin is available on a variety of exchanges despite its small size.

Disadvantages of Fantom (FTM)

  • Fantom’s Internet of Things (IoT) usage cases are currently limited.
  • There are new competitors on the scene (Cardano, Solana, Ethereum 2.0).
  • Joining and running a node is quite expensive, increasing centralization and weakening security.

Read our guide comparing Luna and Algorand.

What Is The Relation Between Luna And Fantom?

The table below gives you an overview of both projects:

ComparisonTerra (LUNA)Fantom (FTM)
Launch date20192018, mainnet came in December 2019
FoundersDaniel Shin and Do KwonSouth Korean computer scientist Dr. Ahn Byung Ik
Consensus MethodDPoS (Delegated Proof of Stake)Lachesis aBFT Consensus Mechanism
Token typeNativeNative
Use caseIt is a fiat-fixed and stable coin that serves as a controlling tool for Terra players.Fantom is attempting to employ a new consensus mechanism designed from the ground up to support DeFi and associated services using smart contracts.
Coins in supply749.65M LUNA2,545,006,273FTM
Market Cap$39.16B$2.98B
Current Price Value per coin$81.09$1.17

Should You Buy Luna Or Fantom?

Both Terra (LUNA) and Fantom(FTM) have upsides and downsides.

Luna is an excellent cross-border payment system for most blockchains and has some of the lowest transaction fees. On the other side, Fantom is the go-to cryptocurrency for developers looking to build their dApps or digital assets. 

If you’re a user or investor, go for LUNA. If you’re a developer, the Lachesis consensus mechanism makes Fantom (FTM) one of the best blockchain platforms for  applications.

Besides that, if you want a lower priced crypto token, choose Fantom over LUNA. 

In a nutshell, LUNA has the potential to give you more returns on investment. It has more dApps, smart contract applications, and more.

FTM is still gaining traction, and who knows? It may compete  for top spot soon.  

What Can You Do With Luna?

Terra (LUNA) is an excellent platform for creating stablecoins that track the price of any fiat currency.

As a user or a developer, you can build plenty of applications on the Terra blockchain and apply its various use cases to solve real world problems. 

Besides that, Terra is the brains behind a slew of blockchain-based payment gateways. It aims to eliminate the need for a single blockchain layer for credit card networks, banking institutions, and payment services.

What Can You Do With Fantom?

Fantom can do several things. The most popular uses for Fantom (FTM) in the industry today are payments, system fees, governance, and staking. 

  • Payments: Fantom is a convenient way to transfer payments to others because of its fast transaction rates and inexpensive costs.
  • Governance: Token holders decide about Fantom’s future because it is decentralized. Changes can be proposed and voted on by holding and staking Fantom.
  • System fees: The Fantom network charges fees in the form of its coin. These fees apply to transactions, smart contract deployment, and the creation of new networks.
  • Staking: Fantom employs a proof-of-stake system. Nodes composed of people’s Fantom tokens verify transactions. You can help secure the network while also earning incentives by staking crypto in this manner

Final Word

Fantom and Terra offer different approaches to solve unique problems in the market. You can trade and stake both for profits, or build on top of their blockchains. Which one do you prefer?