Terra is a network, a blockchain protocol that uses fiat-pegged stablecoins to make price-stable global payments systems possible. Terra combines the price stability of fiat currencies with the reliability of bitcoin and offers quick settlements. Terra's governance and staking token, LUNA, is used to stabilize the price of the network's stablecoins.
Terra has a total supply of 1 billion tokens. Currently, the circulating amount is about 400 million tokens. If more than 1 billion LUNA exist, LUNA will be burned until it returns to the 1 billion supply level. New LUNA tokens are created through the network's algorithm, in order to maintain the price of Terra stablecoins.
According to this article, the Terra blockchain is secured using a proof-of-stake consensus algorithm based on Tendermint. LUNA token holders can stake their tokens as collateral to validate transactions. The holders would receive rewards in proportion to the amount of LUNA staked.