Velo Labs and Terra form partnership to build a next-generation payment system
Velo Labs and Terra are excited to announce that they have entered into a strategic partnership to bring together their technologies and networks to power a next-generation payment system. Bringing together Velo Labs’ federated credit exchange network and Terra’s new payment infrastructure, this partnership promises to create significant synergies in building the future of blockchain-powered payment systems.
The scope of the partnership is threefold:
- Velo Labs and Terra will explore stablecoins swap opportunities leveraging Velo Labs’ federated credit exchange network;
- Terra will integrate with the Velo Protocol to power the use of blockchain technology on cross-border payments in Asia and globally; and
- Velo Labs and Terra will work towards the development of synergistic blockchain payment solutions serving small- and medium-sized enterprises and international travelers in South Korea.
“I’m excited to see the collaboration between Velo Labs and Terra. With this partnership, Velo Labs is furthering its efforts to build a comprehensive alliance ecosystem where we seek to provide well-rounded financial solutions to our partners that bring us closer towards an interoperable universal credit and settlement network.” — Tridbodi Arunanondchai, Vice Chairman of Velo Labs
By partnering with Terra, Velo Labs expands its capability to provide value transfer solutions for partners within the Velo ecosystem. Through the stablecoin swap as well as other payment solution collaborations, the VELO token — a digital asset issued by Velo Labs — extends its ability as a universal bridge asset to enable value transfers. This adds to an ever-expanding partnership ecosystem wherein VELO tokens can be leveraged for potential use cases in digital currency settlement, correspondence and remittance services.
“At Terra, we’re excited to see the future growth of having Terra stablecoins accessible and immediately used in cross border payments in robust and efficient ways. Partnering with Velo is a great path forward to making this a reality.” — Do Kwon, Co-Founder and CEO of Terra
Founded in 2018, Velo Labs is backed by the CP Group and Stellar Network (XLM). Its core mission is to build a federated credit exchange network that allows partners to safely and securely transfer value between each other with maximized efficiency and transparency. Velo Labs currently serves business partners in the remittance and money transfer markets of Southeast Asia. Through its federated credit exchange network, Velo Labs aims to solve the inefficiencies in the current remittance and money transfer markets and become a major settlement hub in Asia, eventually expanding to other regions.
Velo Labs develops the Velo Protocol. The Velo Protocol is a blockchain financial protocol enabling digital credit issuance and borderless asset transfers for businesses using a smart contract system. It enables its trusted partners to issue digital credits via a smart contract layer, using the Stellar Consensus Protocol to process and settle transactions. The Velo Protocol can issue digital credits that correspond to any fiat currency.
Through its services, Velo Labs is looking to create a fully interoperable network that will enable its trusted partners (i.e. businesses, banks, digital banks, cash-in/cash out network, e-wallets, DeFi protocols) to make frictionless value transfers that are settled instantaneously in a cheap, secure, and simplified manner. Further use-cases for the Velo Protocol will also be introduced over time. This includes borrowing, lending, staking, and more. Velo Labs seeks to realize its goals by leveraging on its core capabilities, which include a strong leadership team with a solid track record in a wide range of industries, including but not limited to financial services, technology and telecommunications. Velo Labs is backed by a network of major conglomerates in Asia who are driving the use and adoption of the Velo Protocol and VELO token.
About Terra
Terra is building new financial infrastructure that works better for everyone. The network is powered by a family of stablecoins, each pegged to major fiat currencies all algorithmically stabilized by Terra’s native governance and staking token, Luna. Terra’s mission is simple: make money that is easier to spend and more attractive to hold.
Luna, as the native staking asset from which the family of Terra stablecoins derive their stability, utility, and value, acts both as collateral for the entire Terra economy and as a staking token that secures the PoS network. Luna can be held and traded as a normal crypto asset, but can also be staked to accrue rewards in the network generated from transaction fees. Luna can also be used to make and vote on governance proposals.
The family of Terra stablecoins achieve stability through consistent mining rewards with a contracting and expanding money supply. For example, if the system has detected that the price of a Terra currency has deviated from its peg, it applies pressure to normalize the price. Currently, the family of Terra stablecoins include: KRT (Terra stablecoin pegged to Korean Won), UST (Terra stablecoin pegged to US Dollar), MNT (Terra stablecoin pegged to Mongolian Togrog), SDR (Terra stablecoin pegged to IMF SDR), with more being added in the future.
Terra has made enormous strides in mass adoption within payments space from the Chai payments app built on its platform. Chai has risen to become one of the most popular applications built with blockchain with over 3% of the South Korean population using Chai to pay for goods and services ranging from Korea’s #1 online travel agency, #1 bookstore, #1 gaming publisher, #1 convenience store, the top e-commerce sites, and many more. As of September 2020, Chai currently has over 1.9 million users, an annual run rate of $1 billion, and has shown an average retention rate of over 80% when used with multiple merchants.
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