Summary: Shorting Terra Classic is pretty straightforward, all you need is a crypto broker that allows for short selling. While there are a few exchanges out there that have added the ability to short crypto, our recommendation is to use eToro. They’re well-known, have a global presence, and are trusted by millions of users from 100+ countries.
We’ll be using eToro in our guide, you can sign up with one of the sign-up buttons below.
Before we get started, let’s quickly explain what shorting is (for those that are new to it). Shorting is the practice of selling a cryptocurrency hoping it will drop in price so you can buy it back later for cheaper… which, if successful, will give you a net profit.
It might sound a bit complex but don’t worry, it’s a lot easier than you might think.
How to Short Terra Classic
Shorting Terra Classic can be done in 4 steps:
- Find a crypto broker
- Sign up with the exchange
- Fund your account with fiat or crypto
- Short Terra Classic
1. Find a crypto exchange
As mentioned before, for this guide we’ll be using eToro as they offer the ability to short the most common cryptocurrencies.
You can, of course, use any other crypto broker that allows for short selling.
2. Sign up with the cryptocurrency exchange
Let’s start with creating an account on eToro.
The sign-up process is very quick, as is the verification that needs to be completed afterwards so you can get started.
3. Funding your account
Next is funding your account. You have several deposit methods to choose from when depositing funds into your eToro Account. These include a bank transfer, credit card, debit card, PayPal, and more.
4. Short Terra Classic
These are the steps to follow to execute a short sell:
- Go to the search bar at the top, find Terra Classic by entering the name.
- On the crypto page/section, on the right side, hit the TRADE button to enter the trading interface.
- At the top of the trading interface: Click on sell to short the crypto.
- Enter the amount for which you want to sell Terra Classic and click on “Open Trade”.
Once you’re ready to close the trade, hopefully when the value of Terra Classic has dropped, go to your Portfolio, find the Terra Classic trade, and click on the red cross to close the trade.
If your assumption/prediction was right, then the profit will be added to your account after closing the trade. If you were wrong on the other hand, you’ll incur a loss which will be debited from your eToro account.
Congratulations, now you know how to short Terra Classic!
Disclaimer: Trading, investing, and dealing with digital and cryptocurrencies might involve a lot of risks. Their prices are volatile and performance is unpredictable. Their past performance is no guarantee of future performance.
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Where to Short Terra Classic (LUNC)
Aside from eToro, the other major exchange you can use is Binance.
While Binance tends to be a bit more advanced when compared with eToro, they do have a lot more digital assets to trade with.
Frequently Asked Questions
Can I short Terra Classic on Binance?
Yes, you can short Terra Classic on Binance. They have over 300 cryptocurrencies on offer, have a decent phone app and a lot of advanced trading features.
About Terra Classic
Terra is a financial payment network decentralized on the blockchain that rebuilds traditional payment systems. To enable open financial infrastructure development, it uses a collection of fiat pegged stablecoins which are algorithmically stabilized by Luna. Over 2 million people have used the network to transact an estimated $299 Billion in transactions as of December 2020.
Luna is the Terra platform's reserve coin. It has three core functions. It can be used to mine Terra transactions by staking, ii. ensure stability in Terra's price and iii. provide incentives for platform validators.
Terra protocols runs on a Proof of Stake(PoS) blockchain. Miners must stake Luna in order for them to mine transactions. The chances of generating Terra blocks next time a validator has staked more Luna are higher than those who have staked less. Luna is the mining power of a validator.
Luna holders and stakeholders are therefore exposed to price risks as a result of network validation and network security. Terra protocol quickly exchanges Terra stabilcoins for Luna, at their set exchange rate. This allows them to keep the peg. It will sell Luna stablecoins if there is high demand. It does the reverse when prices and demand are low. Validators can absorb the short-term volatility within the network by doing this.
To compensate for this, validators get rewards in the form: i. Staking rewards, gas fees, iii. taxes, and IV. Seigniorage Rewards. Staking rewards depend on the stake and are designed to encourage increased transaction volume. The Terra transaction fees and taxes are similar. A small fee is charged on all Terra transactions. It is distributed to validators pro-rata. Participants in the Luna exchange rates oracle process are eligible for seigniorage.
These rewards aim at creating mining demand that is stable throughout all economic conditions. If rewards are higher, the protocol lowers network fees or seigniorage awards, and vice versa.
Terra's vision relies on two key elements: stability and widespread adoption. Terra Alliance was formed to promote Terra's eCommerce payment network. TMON, Qoo10 Carousell, Pomelo and Carousell are all members of the Alliance. In 2019, the Alliance had an estimated $25Billion in gross merchandise worth (GMV) with 45 Million users.