Terra is a decentralized financial payment network that rebuilds the traditional payment stack on the blockchain. Luna is the reserve currency of the Terra platform. It has three core functions: i) mine Terra transactions through staking, ii) ensure the price stability of Terra stablecoins and iii) provide incentives for the platform’s blockchain validators.
The burgeoning DeFi a movement encouraging alternatives to traditional, centralized forms of financial services. space on Terra is driving demand for UST, which now surpasses DAI and is positioned as the largest decentralized decentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal. stablecoin on the market.
In the midst of the rise of decentralized finance (DeFi), the stablecoin a cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency. of the blockchain Terra , UST is fast becoming a major player in that space.
UST just became the world’s largest decentralized stablecoin after reaching a market capitalization of USD $10 billion. The milestone was recorded on Sunday, according to data from CoinMarketCap , y represents an increase of nearly 5,000% for UST’s market an area or arena, online or offline, in which commercial dealings are conducted. capitalization in one year. The company’s total revenue was around $200 million by January 2021.
The high market capitalization of the stablecoin of Terra now ranks 23rd among the top cryptocurrencies. UST has also managed to overtake its main rival and predecessor, DAI the decentralized stablecoin of MakerDAO . DAI, which launched in 2017, has a market capitalization of USD $9.3 billion as of press time.
Launched in 2019, UST is a stable currency currency is a medium of exchange that defines value. pegged to the value of the U.S. dollar of Terra. Unlike others of its kind, it is not backed by cash. Instead, it is algorithmically linked to LUNA Terra’s native token. Each UST is issued by burning destroying a certain number of digital coins to reduce their issue. This method is used to fight inflation and increase the value of cryptocurrency. All token burning transactions are recorded in the blockchain as a transaction. Therefore, anyone can verify that the coins were destroyed. USD $1 in LUNA, which decreases the supply of that currency as they are produced. stablecoins .
UST Success is Driven by DeFi
The growing demand for UST on the various DeFi platforms has been a key factor in the new capitalization record. The milestone also comes amid an accelerating bloom for the DeFi space on the blockchain. Terra .
As reported by DiarioBitcoin , Terra last week became the second largest DeFi blockchain just below Ethereum a decentralized open-source blockchain with smart contracts functionality. and above Binance Smart Chain (BSC) in terms of total locked value (TVL) in their protocols.
According to the data provider DeFiLlama , Terra has an LTV of USD$17.9 billion, versus BSC’s $17.3 billion. The blockchain Ethereum is comfortably in first place with more than $162 billion in total value of DeFi locked up. It should be noted that total value blocked is a metric that refers to the amount of funds pledged as collateral collateral is any asset that a lender accepts as a form of security to ensure that the borrower repays a loan. in the protocols and is used to compare DeFi activity in the various Blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. or in individual projects.
UST has been gaining traction in DeFi protocols based on Terra . Like other stablecoins plays a key role in the decentralized finance space by allowing users to generate returns while providing liquidity how easily a cryptocurrency can be bought and sold without impacting the overall market price. to protocols.
One of the protocols that has driven the demand for UST is Anchorthe most popular loan-focused DeFi project in the world. Terra. With an LTV of almost USD$ 9 billion,Anchor accounts for more than half of all DeFi’s activity at Terra .
Users ofAnchor deposit their UST funds, where they are pooled and loaned to other users, expecting to earn returns of 20% per annum (APY). Comparatively, other platforms such as Celsius o BlockFi provide lower yields of between 10% and 9% for stable currencies. According to data fromTokenInsightsAlmost USD$3 billion of all USTs have been deposited intoAnchor.
— TokenInsight (@TokenInsight) December 27, 2021
- Terra is now the second largest DeFi platform a place to buy, sell and store cryptocurrency and LUNA token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. conquers price highs
- Avalanche integrates USDC stablecoin in a further boost for DeFi
- Circle backs possible regulation of U.S.-based stablecoin issuers
Article versioned by Hannah Estefania Perez / DiarioBitcoin
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