Terra (LUNA), the native token on the blockchain of the same name, overtook Solana (SOL) on Wednesday to become the sixth largest crypto token by market capitalization. LUNA also hit an all-time high as DeFi adoption skyrocketed.

LUNA jumped a whopping 5%, briefly hitting an all-time high of $119.10, with a market cap of $41.3 billion. The most recent spike can be attributed to Binance offering UST strike at nearly 20% yield.

The token is tearing up after hitting the lows of 2022 in February. Much of it is fueled by the growing popularity of UST and the popularity of the Terra blockchain as a DeFi platform.

DeFi growth a key factor in LUNA rally

Terra’s popularity in the DeFi space is supported by the community’s efforts to maintain liquidity. Terra is currently the second largest DeFi blockchain with a total value of $21 billion.

This in turn stimulated the use of LUNA as it is the primary medium for transactions in the chain.

Terra’s Anchor Protocol (ANC), the largest protocol in the chain, has also become hugely popular by offering the largest yields in DeFi at nearly 20%. Although the platform recently voted to cut revenue, it still has more than $16 billion in TVL, the third highest among all DeFi platforms.

In addition, the Terra community regularly burns LUNA to strike UST – a move that reduces LUNA’s overall supply and increases its price. According to data from Terra Analytics, nearly three million tokens have been burned in the past five days. This brings LUNA’s total supply to a record low of 351 million tokens.

Terra eyes stablecoin dominance

Terra founder Do Kwon has repeatedly stated his goal of making UST the most popular stablecoin. To that end, the Terra community has consistently acquired Bitcoin (BTC) to use as a reserve for UST – a move that has also boosted LUNA’s popularity.

The goal is not to become the largest stablecoin on the Terra blockchain, so we are expanding into the Solana, Avalanche, Ethereum and Polygon ecosystems. We intend to be everywhere developers and users are.

Kwon said in a recent interview.

UST is the largest algorithmically backed stablecoin, which uses a mix of reserves and tokenomics to maintain its dollar peg.

Kwon plans to collect as much as $10 billion worth of BTC to use as reserves. This move would be positive for LUNA, as it ensures adequate liquidity on all Terra’s DeFi protocols.

So far, the Terra community has acquired at least $3 billion worth of Bitcoin.


The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.

About the author

With over five years of experience in global financial markets, Ambar plans to leverage this knowledge for the fast-growing world of crypto and DeFi. His main interest lies in finding out how geopolitical developments could affect crypto markets and what that could mean for your bitcoin holdings. When he’s not scouring the internet for the latest news, you can watch him play video games or watch Seinfeld reruns. You can reach him at [email protected]

This post Terra (LUNA) surpasses Solana (SOL) to become 6th largest cryptocurrency

was published first on https://coingape.com/terra-luna-surpasses-cardano-ada-to-become-6th-largest-cryptocurrency/


Write A Comment