
What is Terra and UST?

Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
$105,301.00
4.58%$2,406.65
7.89%$2.16
6.97%$640.50
3.94%$144.28
9.28%$0.999904
0.01%$0.273315
3.62%$0.16388
8.11%$2,404.57
7.79%$0.582472
7.58%$105,312.00
4.61%$38.01
7.52%$2,909.18
8.30%$2.81
14.44%$462.52
2.01%$12.85
10.01%$9.13
1.14%$0.245695
7.24%$18.07
9.02%$0.999925
0.03%$2.92
6.57%$47.96
-0.37%$0.00001163
9.63%$0.152882
13.80%$85.11
5.79%$2,405.05
7.78%$1.001
0.14%$2,580.84
8.11%$311.12
4.05%$1.00
-0.02%$3.42
8.44%$4.20
4.08%$105,380.00
4.65%$0.00000993
11.59%$6.78
7.77%$0.535451
4.23%$255.63
12.34%$1.18
0.05%$52.03
4.66%$349.01
13.62%$1.00
0.00%$4.33
10.00%$4.95
8.20%$1.056
0.01%$0.084737
5.57%$2.13
11.84%$174.84
9.43%$16.45
8.00%$0.756724
12.45%$1.001
0.15%$27.28
-0.25%$0.604293
3.11%$16.72
5.21%$0.073455
14.34%$4.44
0.15%$4.07
9.13%$0.02155052
11.27%$9.22
5.19%$0.690058
17.49%$0.08291
14.90%$105,281.00
4.28%$3.21
14.31%$0.268456
11.95%$0.181305
5.13%$0.180047
12.28%$0.926405
11.01%$2.25
8.38%$0.301899
12.24%$4.37
4.80%$0.995901
-0.25%$2,409.39
7.91%$1.00
0.05%$98.33
9.14%$1.00
0.04%$11.08
3.27%$0.246914
23.91%$153.09
9.89%$0.208553
9.20%$1.19
8.23%$0.403737
16.30%$0.01715144
7.69%$2,741.88
7.88%$1.20
17.14%$2,518.74
7.69%$1.69
23.51%$0.00001413
15.23%$1.59
12.96%$10.95
12.17%$1.037
12.01%$0.319996
20.28%$1.001
0.06%$1.002
0.18%$0.632082
13.02%$0.547179
12.08%$0.058692
4.84%$3.22
15.50%$1.00
0.00%$2,575.77
7.92%$105,178.00
4.43%$2,523.78
7.65%$1.11
-0.01%$3,367.17
-1.09%$641.46
4.14%$105,094.00
4.35%$0.837386
21.75%$3,350.81
-1.11%$105,996.00
3.96%$2,530.85
7.77%$0.081569
11.07%$0.512662
7.04%$0.577231
7.25%$0.418726
15.52%$161.48
9.49%$2.13
5.39%$187.76
9.17%$111.54
0.02%$0.837987
8.18%$0.00007274
13.71%$2.18
7.92%$2,600.90
7.72%$0.671692
11.85%$41.47
8.75%$0.999142
0.12%$0.01014226
0.87%$0.707394
7.56%$1.09
-0.26%$0.01399951
11.44%$0.01293985
17.41%$0.256143
10.00%$0.00993602
17.16%$18.76
10.10%$0.161789
9.99%$30.95
4.92%$0.233847
9.26%$0.997856
0.03%$104,781.00
4.73%$1.98
7.06%$0.0000006
6.79%$3.59
9.56%$0.42676
12.46%$0.534484
8.10%$104,974.00
4.44%$37.82
6.75%$0.095417
10.86%$2.05
10.60%$2,408.37
7.84%$0.523324
6.05%$0.331703
9.09%$0.490467
12.92%$2,406.40
7.71%$105,429.00
4.66%$1.00
0.10%$2,571.80
7.87%$0.262779
10.65%$2,514.57
8.12%$0.99747
-0.09%$0.613658
9.59%$0.01438297
12.29%$1.37
9.92%$2,405.05
7.54%$0.424622
4.17%$8.00
1.50%$48.03
6.32%$37.82
6.73%$0.061315
0.65%$0.169552
43.49%$0.999903
0.01%$2.35
7.59%$0.04333221
20.35%$0.99968
0.00%$1.36
16.86%$0.163797
8.17%$1.091
0.04%$0.407406
8.57%$0.994505
-0.65%$0.0000004
2.67%$5.56
10.73%$0.0042592
25.08%$1.001
0.03%$0.999771
-0.01%$0.114784
11.66%$2,409.72
8.28%$13.45
11.66%$0.00655091
18.43%$0.319924
15.72%$0.00001881
8.23%$2,554.51
7.89%$2.26
10.36%$0.512383
7.18%$0.971393
15.09%$0.487508
11.08%$0.00416459
19.30%$0.00000092
25.19%$1.15
13.72%$0.069598
9.22%$0.355351
5.04%$0.166988
-1.58%$1.44
12.66%$0.03508206
4.85%$0.138181
19.90%$1.20
6.37%$0.347444
7.28%$5.26
8.54%$0.0351606
8.65%$2,654.04
8.01%$105,183.00
4.58%$105,233.00
4.73%$0.01677336
4.32%$0.00320251
14.58%$19.68
1.75%$2,632.59
7.71%$1.00
0.00%$0.03169103
2.84%$0.999519
0.06%$157.44
9.28%$1.001
0.18%$2,407.55
7.82%$0.00005552
6.00%$0.999864
0.00%$0.712994
6.42%$1.094
12.65%$10.06
4.46%$0.735583
23.39%$0.300214
16.45%$0.444625
7.59%$2,402.35
8.16%$109.46
8.45%$0.00338196
8.83%$0.060951
11.68%$105,339.00
4.64%$18.08
9.46%$0.00000136
2.94%$1.69
-0.94%$1.001
0.27%$0.599441
7.84%$0.00512234
12.51%$103,265.00
5.72%$0.585937
15.11%$0.181219
4.98%$2,115.09
4.64%$1.017
0.07%$6.07
10.37%$0.181815
8.71%$101,461.00
3.33%$0.00363468
15.97%$14.81
9.48%$0.999221
0.00%$19.80
8.13%The stablecoin for the Terra ecosystem is a hair’s breadth away from flipping Maker’s DAI to become the fourth-biggest stablecoin by market capitalization, according to data from CoinGecko.
TerraUSD (UST) currently has a market cap of $8.78 billion, whereas DAI corners $8.82 billion of the market. In terms of growth, though, UST has enjoyed impressive upwards momentum of late.
In the last thirty days, the market cap of Terra’s UST stablecoin has grown by over 90%.
Compare that to DAI’s 3% growth and it's conceivable that a flipping is imminent.
Terra is a stablecoin creator. This means you can use the platform to mint any fiat-pegged stablecoin, and there are many, including TerraGBP and TerraEUR.
The blockchain is built using the software developer kit from Cosmos, another interoperable blockchain. It’s currently the fifth-largest layer 1 smart-contract enabled network, behind Polkadot, Cardano, Solana, and Ethereum.
Terra’s stablecoins are not backed by typical methods. Unlike the two leading stablecoins, Tether and USDC, which are reportedly backed by cash reserves, all of Terra’s stablecoins are tied to LUNA.
Whenever users want to mint UST, they have to burn the equivalent of a dollar in LUNA. The same mechanism is at play whenever users want to mint LUNA; they first need to burn UST.
Maker’s DAI, on the other hand, is backed by over-collateralization. To create DAI, users have to lock up more than 100% of the value of DAI they want to create using other cryptocurrencies, like Ethereum or USDC.
Terra’s propitious market performance isn’t just a product of UST’s success as a reliable stablecoin. The stablecoin issuer’s native LUNA currency has also exploded recently.
At the beginning of the month, LUNA charged into the top 10 cryptocurrencies with overnight price hikes mounting as high as 58%.
One of the primary reasons behind both tokens’ respective rises, comes from a doubling-down on the network’s burn mechanism.
The first initiative was a protocol upgrade called Columbus-5 which moved to permanently destroy LUNA burned when minting UST. Previously, this LUNA was moved to a pool to fund different Terra developments. Second, a proposal was made by the project’s founder Do Kwon to destroy the remaining LUNA (in exchange for UST) in the fund which was gathered prior to Columbus-5.
Alongside this mass LUNA burning, DeFi protocols on Terra are popping up left and right. And like Ethereum, stablecoins are the lifeblood of DeFi, creating even more demand for UST. Around $12.3 billion of Terra is already locked up in just ten DeFi protocols.
Couple that with the rate at which UST is being minted, and it’s fair to say that Terra’s stablecoins are becoming a solid mainstay in DeFi and the wider crypto market.
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.