- Terra Network’ s indigenous coin LUNA touched the $100 price levels in the crypto market on Friday in the European Hours.
- Terra is an open-source blockchain payment system accommodating the stablecoins, with the biggest stablecoin being TerraUSD.
- It is believed by some people that the Anchor is the primary reason investors are attracted towards Terra.
LUNA Tops $100
Terra’s indigenous coin LUNA was able to reach the $100 price level on Friday. The advantage was taken by the traders as they were able to bring it back to $98 after a 10% drop to $85. After that, a declaration was made by Binance, a crypto exchange, that it will be enlisting UST, a Terra-issued stablecoin, to boost LUNA to reach above $100.
The price surge caused the TVL in DeFi to surpass the $21 Billion milestones, as per the live data in DeFi Llama, making it the second-largest ecosystem in DeFi. Total Value Locked of Terra has surged around $3 Billion from Wednesday to reach $21 Billion.
Anchor has a Total Value Locked of more than $9 Billion, a yield-producing application based on stablecoin. Total Value Locked of TerraSwap, a decentralized exchange developed with smart contracts of Terra, has surged 81% since last week to reach $2 Billion.
Rather than intermediaries, protocols of DeFi are dependent on smart contracts to offer monetary facilities like credit, trading, etc.
The value is divided among a total of 13 protocols, or at an average of $1.6 Billion per protocol, as compared to $73 million average on the Binance Smart Chain, currently at no. 3 among the largest DeFi ecosystems, having a total value locked at $17 Billion, divided among 232 protocols.
Anchor Lures the Investors
Many people believe that the significant reason investors are attracted towards Terra is its top application, Anchor. Steinberg Invest’s founder Marvin Steinberg stated via a telegram message to Coindesk that, “A 20% APY [annual percentage yield] on UST deposits through the Anchor Protocol is very appealing because capital flows from price-volatile assets to more risk-averse yield-bearing positions.”
An increase in price levels of LUNA is an element for a wider multi-month rally. One kept afloat by changes in November regarding its token mechanism, like burning, that regularly reduces the supply and raises the operations of DeFi applications based on Terra. That is the reason for Terra’s push to become No. 9 in the crypto market, having a market cap of $36 Billion.
LUNA is utilized for staking and regulating in the network of Terra. Luna can be staked by the users to become verifiers on the network and then validate transactions afterward, receiving rewards against their work. Through LUNA token burning, minting of the latest stablecoins can be done. The algorithmic market protocol is utilized by the protocol for maintaining the stability of the stablecoins.
As per the cryptocompare data, the digital asset has surged 28% in a week to top $100 price levels.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.