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- Terra’s stable coin UST becomes 5x in valuation in 2021 and reaches the $10 billion mark, with $18 billion locked in the DeFi ecosystem,
- Terra’s other token, Luna, matching the steps of UST, Terra’s stablecoin, also reached over $31 billion in market capitalization and ranked at number nine according to Coingecko’s listings.
- In terms of usage in the DeFi ecosystem, Terra has also outperformed its closest competitor, DAI, MakerDAO’s token.
It is quite evident that DeFi has been flourishing lately, and UST, Terra’s stable coin stands out as a formidable player in DeFi among the crowd of centralized tokens such as Circle’s USDC and Tether’s USDT.
Over the few years, Stablecoins haven’t been very appealing. However, Terra, an open-source blockchain, can change the current situation and simultaneously help reinforce the role of stable coins in the evolving DeFi (Decentralised Finance) ecosystem.
This past Sunday, the platform’s stable coin – UST- hit $10 billion in market value, which is almost a 5x increase in its valuation this year since around January when it was $200 million, according to digital currency analysis website, Coingecko.
The coin also became the second-largest decentralized stablecoin after Tether, which hosts the USDT token, surpassing its closest competitor, DAI.
MakerDao, a blockchain-based decentralized autonomous organization (DAO), hosts DAI, whose total market capitalization at the time of writing is about $8.9 billion while Terra’s stablecoin UST was around $10.1 billion as per Coingecko’s listings.
Although failing to hit the $10 billion mark even earlier this week, UST was successful in surpassing DAI earlier this month. This shows that Terra blockchain has become a significant part of the evolving DeFi blockchain. About a year after MakerDAO’s DAI came into existence, in January 2018, the platform was launched.
Another Terra Cryptocurrency That Is Booming
Terra’s LUNA token is also doing well with Terra’s stablecoin UST token. On Coingecko’s list, the token ranks at number nine with a market capitalization of over $31 billion.
In November, JPMorgan Chase & Co., an American multinational investment bank, made a statement saying that the total value locked (TVL) in the Ethereum-based DeFi ecosystem was around $200 billion and has multiplied ten times since 2020.
According to blockchain research platform DeFi Llama, The TVL in the Terra platform currently stands at $18 billion.
Platforms such as Terra assist companies bypassing Ethereum’s volatility and other crypto assets because their values are in close connection to the US Dollar and, therefore, don’t vary as fast as Bitcoin or Ethereum.
Nonetheless, JPMorgan also cautioned that the rise of Decentralised Finance or DeFi platforms “reflects a valuation effect” and might not be as imposing as it seems.
The bank said, “However this impressive growth in dollar terms mostly reflects a valuation effect, i.e., the mere fact that the Ethereum price has risen by 1,000% over the past year,”
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.
