DeFi Traders Push Terra’s UST Stablecoin to $10B Market Cap
By Tracy Wang
The Terra blockchain’s fast growing stablecoin UST, which had surpassed its rival DAI to become the largest decentralized stablecoin, has how attained another milestone: a market capitalization of $10 billion.
According to the crypto pricing site CoinGecko, the UST market cap pushed past $10 billion on Sunday. As recently as the beginning of 2021, the market capitalization was under $200 million.
Earlier in December, UST overtook rival MakerDao’s decentralized stablecoin DAI, whose market capitalization sits at around $9.4 billion. And DAI has been live since 2017.
The fast growth in UST comes as the Terra blockchain has become a major player in the decentralized finance (DeFi) sector, where stablecoins play a critical role in staking, liquidity management and yield-generating.
Terra’s LUNA token has been one of the top performers among all digital assets this year, jumping 15-fold in price to a reported market capitalization of $34 billion, according to the crypto data site Messari.
Last week, Terra overtook Binance Smart Chain (BSC) for second place in total value locked (TVL), a metric used to compare the DeFi activity occurring on various blockchains or for individual projects. According to data provider DeFi Llama, Terra boasts $17.9 billion in locked assets, versus $17.3 billion for BSC. The Ethereum blockchain sits comfortably in first place with over $162 billion in DeFi total value locked.
The most popular DeFi project in the Terra ecosystem is Anchor, a lending protocol with nearly $9 billion in TVL, accounting for over half of all DeFi activity on Terra.
A popular trade involves users depositing UST into the Anchor protocol, where the tokens are subsequently pooled and lent out to interest-paying borrowers. The accrued interest is then distributed pro rata to all depositors, who expect to earn an annual percentage yield (APY) of 20%.
According to data from TokenInsights, nearly $3 billion of all UST have been deposited into Anchor.
Editor’s Note:
Start investing In cryptocurrency with Bitxchange www.bit-xchange.org. If you’re new to the world of crypto and figuring out how to buy cryptocurrencies, then cryptocurrency exchanges like Bitxchange can help you to easily buy and sell crypto.
