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    Market Module

    In this dashboard, we will deep into market module in Terra blockhain. According to Terra Docs' definition; 'The Market module enables atomic swaps between different Terra stablecoin denominations, and between Terra and Luna. This module ensures an available, liquid market, stable prices, and fair exchange rates between the protocol’s assets.' So, for better understanding, let us imagine that the entire Terra economy consists of a $UST pool and a $LUNA pool. To maintain $UST price, the LUNA supply pool adds to or subtracts from $UST's supply; users burn $LUNA to mint $UST and burn $UST to mint Luna. This is how market module functions in Terra, which incentivizes the minting or burning of Terra through arbitrage opportunities.

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    Illustration by @danku_r above shows the relationship of $LUNA and $UST. Graph below shows the daily $UST and $LUNA minted through market swap (ie $LUNA<>$UST on Terra Station market swap).

    $UST is a stablecoin where TFL designed with mass adoption in their mind. So, many utilities and protocol are made around $UST to support it's adoption to become native stablecoin on DeFi and real world. Hence why we're seeing exponential growth in $UST marketcap and same goes to $LUNA circulating supply except it's in opposite direction.

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    In conclusion, Terra has a very unique tokenomics and the supply of $LUNA is dynamic. $LUNA can be burned to mint $UST and vice versa. With more adoption of $UST, we can expect to see a supply shock. Currently, circulating supply of $LUNA is below 400M and expected to go lower.