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- As part of Terra’s popular DeFi protocol Anchor’s plan to expand into new blockchains, Anchor will be integrating with Polkadot’s Acala network.
- The main impact of the development will be that now the collateralization of staked and unstaked KSM and DOT will be allowed for minting UST.
- So far, no notable impact of the recent development could be seen on the price of LUNA.
Recently, Terra’s popular DeFi protocol, Anchor has announced its integration into Polkadot’s DeFi Hub Acala. The partnership will boost the plans of Anchor to expand into new blockchains while Polkadot aims to further DeFi adoption.
As per a press release, Acala and Karura, Polkadot’s para chain, will provide more collateral options for the UST stablecoin with Liquid DOT (LDOT) and Liquid KSM (LKSM).
Anchor Protocol aims to increase the utility of UST with the development and make it the most popular stablecoin.
What Will Change After The Development?
The major impact of the development is that for minting UST, now the collateralization of staked and unstaked KSM and DOT is enabled. This will lead to liquidity pools offering staking opportunities for DOT and KSM holders, in turn enabling them to gain staking yield for UST minting.
The aim of the development is to go beyond LUNA and broaden the collateralized assets. The price of the LUNA might not be affected directly but there is the probability of organic growth for the Acala and Karura. This would result in increased demand for ACA and KAR.
Impact On The Price Of LUNA
At the time of writing, the price of LUNA stands at $81.47, down 0.54% in the last 24 hours. Terra’s LUNA is following a bearish price correction trajectory after running at $119 during its latest bull run.
After the recent announcement, there didn’t seem to have a significant impact on the price of LUNA.
The recent development is an indication of growing collaboration within the DeFi space. These collaborations will boost the further growth of the DeFi field. Besides, for the UST, it paves the path for it to become the most popular algorithmic stable coin in the world.
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.
