Today at CryptoNewsZ, we are joined by a serial entrepreneur Daniel Shin, Co-founder of Terra, also a co-founder and board member of Fast Track Asia, and the founder and former CEO of Korea’s leading e-commerce platform TMON. Daniel has been building companies for the past 9 years.
CryptoNewsZ: Welcome to CryptoNewsZ Daniel, our readers would love to know more about your journey in the blockchain and crypto domains.
I founded and grew one of Korea’s largest e-commerce platforms called TMON, and every year, we would spend millions just on transaction fees. I naturally got interested in the payments industry, wondering how we can make the process more efficient. When I connected with Terra’s other co-founder Do Kwon and started learning about the possibilities of blockchain and crypto, I knew that this is the technology that can really disrupt not just payments but also the financial services industry in general.
CryptoNewsZ: You are a graduate in BS in Economics from Wharton Undergrad and are also known as one of the best-known entrepreneurs and investors in East Asia, with extensive expertise and deep networks in e-commerce; how did you come up with this innovative idea of introducing Terra?
When Do and I got serious about starting Terra, we couldn’t find a single cryptocurrency that was actually being used. And to this day, the industry still struggles with driving mass adoption. We identified two key problems that we would first tackle to create something that is widely used.
First was price stability. The term ‘cryptocurrency’ was feeling more and more like an oxymoron; By definition, a currency has to have the quality of being generally accepted and used, but because of extreme price volatility, mainstream consumers and merchants wouldn’t want to use or accept crypto. So, we designed a decentralized stablecoin that can realize the original vision of Bitcoin and serve as digital cash.
The second part we focused on was adoption. From the onset, we knew that just because you created something useful, that doesn’t mean that it will get used. So, I connected with other entrepreneurs who started large e-commerce platforms in Asia, and they all bought into Terra’s vision and value proposition. These platforms will serve as a gateway to get mainstream consumers to immediately start using Terra to buy everyday goods and services.
CryptoNewsZ: Daniel, could you please brief us about Terra and why did you choose to go the algorithmic route?
At its core, Terra is an algorithmic stablecoin that powers our blockchain payments network. It aims to become the first widely used cryptocurrency by pushing adoption through a formidable e-commerce alliance, which includes Asia-Pacific giants such as TMON, Baemin, Carousell, Qoo10, and Tiki. To date, we have 25+ partners who push over $50 billion in annual transaction volume, serving as an ideal launchpad for Terra.
Terra keeps its price steady through a mechanism commonly used by the world’s central banks: increasing and decreasing the money supply. What this means is that as Terra’s economy and transaction volume grows, we can use money supply growth or what’s called ‘seigniorage’ to fund discounts that benefit retail consumers. The value proposition to the end-user is simple: enjoy the same checkout experience you’ve become accustomed to at a 5–10% discount made possible by Terra’s monetary policy.
CryptoNewsZ: How is Terra maintaining ‘price stability’ and what is the role of the Luna token?
To add on to what I shared earlier, the Terra protocol involves both stablecoin Terra and another native token called Luna. Luna is our mining token, which derives its value from Terra transaction fees. Luna also facilitates the expansion and contraction of Terra’s money supply to keep its price stable. The protocol acts as a market maker for Terra and uses Luna to buy and sell at the target price, meaning that it mints Luna to buy Terra and earns Luna when selling Terra. In other words, the supply of Luna absorbs changes in demand for Terra.
CryptoNewsZ: Terra’s incredible mobile payment app CHAI has been on fire in the Korean market. CHAI is now also available on the interior design and furniture platform, OHOUSE. What are your expectations from CHAI and what grand plans do you have regarding its mass adoption?
In fact, CHAI is currently available on 5 major platforms in Korea, including OHOUSE and TMON, one of the largest e-commerce platforms! To date, CHAI has over 400,000 users and shows strong double-digit weekly growth rates. To keep this growth going, we are aggressively integrating with our existing e-commerce partners and adding new ones from different verticals. The goal is to continue to grow so that Terra is behind a large share of all online and offline transactions in Korea and beyond.
CryptoNewsZ: Recently, Terra has added South Korean music streaming platform bugs to its e-commerce alliance; CHAI will be the public face, while Terra will provide the backend blockchain technologies. What processes do you aim to streamline through this collaboration?
Terra replaces the complicated payments value chain, which includes multiple players such as credit card networks, banks, and payment gateways with a single blockchain layer. By doing this, we can offer merchants a significantly cheaper transaction fee, saving them money that can be reinvested in something else. Our e-commerce partners bought into our vision because they felt the dire need to make payments more efficient, and we are excited to continue partnering with platforms like Bugs to expand our reach.
CryptoNewsZ: Terra is expanding its footprint by working with global partners that have become essential parts of everyday life. What’s next in the pipeline for the next season? Any upcoming partnerships?
CHAI’s integration schedule with Korean partners is pretty packed for the rest of the year. We have new big partners joining, with announcements to follow soon, but one thing we are really excited about its expansion to Southeast Asian markets.
By end-of-year, we plan to open up an operational office in Singapore, with the goal of launching CHAI in early 2020. We’ve also started the groundwork to expand to Hong Kong, Mongolia, and Taiwan, so 2020 is going to be an exciting year for Terra.
CryptoNewsZ: Daniel, you have extensive experience in all your ventures; what advice would you give to those currently trying to get a start-up off the ground?
Make sure you have a clear value proposition and focus on user growth. That’s the most important metric for any start-up!
Thank you for your valuable time, Daniel. It was a pleasure interacting with you and we wish you tremendous success in all your ventures.