Terra ecosystem is recording gains and ATHs
Even in a sluggish market, Terra is rapidly adding value to its ecosystem.
While the rest of the crypto market was grappling with a bearish turn recently, the terra_money ecosystem stood out as one of the most resilient crypto projects. Their recent developments have set it soaring as of late.
Let's take a look.
Total Value Locked
Terra's DeFi ecosystem has surpassed avalanche & solana in terms of TVL currently standing at $11.89B. Notably, it has increased since Nov 27 from $9.80B to $14.36B marking its ATH on Dec 5th.
Lots of UST being minted
There has been an explosion of $UST supply recently, growing from $2.88B to $8.73B with 203.13% increase since Nov 9. This has been a result of $LUNA Burn which started due to the on-chain votes for proposals 133 & 134 to burn the 88.675 million Pre-Columbus 5 $LUNA.
LUNA Burn
The recent Columbus-5 upgrade introduced a few changes to Terra like the Wormhole bridge & IBC in conjunction with the “burn all seigniorage” proposal. Keeping this process in mind through the current proposal, 88,675,000 $LUNA from the stablecoin community pool will be burned.
This will be used to mint ~$4.5 billion $UST which will consequently reduce the total supply of $LUNA by 88,675,000. $LUNA’s tokenomics has been able to burn more than 106M $LUNA over the past 3 months.
LUNA Price increasing
As a result of this lots of $LUNA is being burned which is further reducing its supply, causing the price of $LUNA to push upwards. With the burning process commencing in November, the prices of $LUNA shot up considerably.
UST looking to overtake DAI
The market cap of $UST currently stands at $8.73B which is only 18 Million short of DAI, the de facto stablecoin on Ethereum's DeFi ecosystem. There are many use cases for utilising the $UST on different chains to make it the number one decentralized stablecoin in DeFi.
Wormhole Bridge
Huge volumes of $UST were being transferred using the wormhole bridge in a very short period. Wormhole is a cross-chain bridge making it easy for users to port these assets across Solana, ethereum , BSC, terra & Polygon.
As part of the recent Columbus-5 upgrade, Terra now supports IBC which will bring $UST into the Cosmos ecosystem. The IBC (Inter Blockchain Communication Protocol) provides support for interchain communication between Solana, Polkadot, and Cosmos .
UST on Cosmos
OsmosisDEX - IBC-native Cosmos interchain AMM already has $UST and $LUNA pools. Another protocol called InjectiveLabs recently launched their first bridge using IBC to Terra integrating the Terra Station Wallet along with $LUNA & $UST transfers to the protocol.
Terra Ecosystem
Terra had a strong concern for interoperability right from the start and things have moved very quickly for it. There are a lot of new projects that are being developed on the network.
Conclusion
As Web3 adoption is gathering steam, Terra is becoming a disruptive force at the intersection of DeFi and TradFi. And, with it continuing to attract new protocols, Terra's demand is expected to further accelerate. We can look forward to a lot of real-life use cases of the network.
Endnote
Don’t let the noise distract you, cut through it with our meticulously curated daily newsletter.
Subscribe to CryptoMatters and get more updates - https://bit.ly/2W0kYW1