Terra is a blockchain protocol that allows, for example, the creation of fiat-linked stablecoins. It offers fast and affordable settlements. Several such stablecoins currently exist, one of the most prominent being the USD-backed TerraUSD (UST). Terra aims to combine the benefits of cryptocurrencies with the daily price stability of fiat currencies by using fiat-linked stablecoins. It maintains a one-to-one lock-in through an algorithm that automatically adjusts the supply of stablecoin based on demand. Terra's native token, LUNA, is used to stabilize the price of stablecoins. LUNA holders can also submit and vote on management proposals, thus providing the function of a management token. It can also be used to settle transaction fees and for staking. The Terra blockchain is provided by the Tender-based Proof-of-Stake algorithm, where LUNA token holders pledge tokens as collateral to validate transactions and receive rewards proportional to the amount of their stake.

Token holders can delegate others to validate transactions on their behalf, sharing the revenue.