Quick summary: Our recommendation is to use eToro to short Terra Classic. They have the most popular cryptocurrencies on offer, great support, and have an easy system for shorting cryptocurrencies in general.
While there are a lot of options out there for buying LUNC, shorting is a different story. Luckily for us here in Australia, we do have a few crypto brokers and exchanges that allow for CFDs and shorting.
One of those brokers is eToro, which we’ll be using for this guide. Let’s get started!
How to Short Terra Classic in Australia
A quick recap first on what shorting actually is: The main objective of shorting or short selling is to make a profit (of course). The idea is to sell a stock/cryptocurrency hoping it will drop in value so you can buy it back later for cheaper, thus creating a net profit.
Shorting Terra Classic can be done in 4 easy steps:
1. Choose 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 to follow along, they all work very similarly.
2. Create an account on the cryptocurrency trading platform
Let’s start with just signing up with eToro.
The sign-up process is very easy and quick, as is the verification that needs to be completed afterwards so you can get started.
3. Funding your eToro account
Next is funding your account. You have several options when it comes to depositing AUD into your eToro Account. These include a bank transfer, credit card, debit card, PayPal, and more.
4. Short Terra Classic
Now for the actual shorting:
- Starting off at the search bar at the top, find Terra Classic by entering the name or symbol.
- Then 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 sell the stock.
- 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 complex compared to eToro, they do have more cryptocurrencies on offer.
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 and specialise in the crypto market. They also have a great app and competitive fees.
About Terra Classic
Terra is a blockchain-based decentralized financial payment network. It rebuilds the traditional payment chain. It uses a set of fiat-pegged stablecoins algorithmically stabilized by Luna to enable programmable payments as well as open financial infrastructure building. It has carried out $299 billion worth of transactions since December 2020 for more than 2,000,000 users.
The Terra platform's reserve currency, Luna, is Luna. It has three main functions. It is used to mine Terra transactions using staking.
Terra operates on a Proof of Stake (PoS), blockchain. This means that miners must stake Luna to mine transactions. A validator with more Luna stakes has a better chance of generating Terra blocks than one who stakes less. Luna, in essence, is a validator’s mining ability.
Luna holders and other stakers are still exposed to the risk of the asset's price volatility because they have to provide network security and validation. Terra protocol easily exchanges Terra stablecoins to Luna at the determined exchange rate in order to maintain the peg. If Luna is in high demand and prices are high, it will buy stablecoins. It will do the opposite when there is less demand and lower prices. This allows validators to absorb short-term volatility.
To compensate, validators receive rewards in the following forms: i. staking reward, ii. gas fees and iii. taxes. iv. seigniorage. Staking rewards are determined according to the stake held by a validator and are intended to increase transaction volume. Taxes and gas fees are similar. Validators pay a small fee on all Terra transactions. Finaly, validators who participate on the Luna exchange rate process will receive seigniorage benefits.
These rewards are designed to ensure that mining demand is steady and constant in all economic situations. If rewards increase, protocol fees and seigniorage reward decrease, and vice versa.
Terra is seeking to realize its vision through stability and mass adoption. Terra Alliance is a consortium of companies formed by the platform. Its purpose is to encourage the use of Terra’s payment network in the eCommerce marketplace. TMON and Qoo10 are some of the Alliance's most well-known players. The Alliance's gross merchandise value (GMV), was $25 billion. It also had 45 million users in 2019.