Terra

Protocol time

	Protocol time	Human readable time
Protocol time	Block	7.23 seconds
First reward delay	1 block	7.23 seconds
Reward frequency	Every block	7.23 seconds
Unbonding period	21 days	21 days

• The protocol has an implicit block time target of 7.23 seconds. However, this is not an enforced parameter and block times can fluctuate depending on network conditions. Block times have been clocking closer to 6 seconds.

Lifecycle

Must know before staking

Minimum stake amount	❌
Partial stake changes	✅
Partial reward withdrawal	❌
Compounding	❌
Penalty	✅	Offline - 0.1%
Slashing	✅	Equivocation - 5%

• Terra is a forked protocol from Terra Classic. Terra’s token is denominated as LUNA.

• Terra airdropped its tokens to holders of Terra Classic. Please read the following post for more details on the airdrop distribution.

• Redelegation without unstaking. The protocol allows stakers to switch their validators without having to unstake and then stake again. The redelegation function can be used only once every 21 days.

Advanced topics

General

• Governance power delegation. By staking with a validator, stakers are delegating governance power to that validator as well. Stakers have the option to overwrite their validator’s governance vote.

Rewards

• Rewards come from newly issued tokens and transaction fees.

  • Inflation rate applied to total token supply. Inflation rate is fixed at 7% based on the implicit protocol block time.

  • Transaction fees.

• Factors that impact realized rewards.

  • Block proposer. A validator selected to propose blocks earns from 1% to 5% more rewards depending on how many other validator consensus votes have been collected.

  • Commissions.

Risk

• Penalty. A validator that fails to be online for 500 blocks out of the most recent 10,000 blocks will be considered offline. Stakers of an offline validator will be penalized and lose 0.1% of their stake. The offline validator will kicked off the active validator set and will be able to join only after 10 minutes has passed.

• Slashing. A validator that attests to two different blocks will be slashed. Stakers of a slashed validator will lose 5% of their stake. The slashed validator will be indefinitely kicked off the active validator set and will need to create a new validator.

Validators

Total validator cap	✅	130
Validator requirements	❌

Resources

• Terra documentation: https://docs.terra.money/