DeFi Value on Terra Surges to Record $21B as LUNA Tops $100
Thursday’s dip to $85 for LUNA tokens was erased overnight.
![Prices for LUNA hit another record high in just a month. Credit: Annie Spratt/Unsplash](https://www.coindesk.com/resizer/uBThAPDZp3BBVUsLOtUgC3GvrPw=/567x378/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/K56J7QGPHRCPLFPCOCJJJZXZWE.jpg)
LUNA, the native token of decentralized payments network Terra, jumped to over $100 in European trading hours on Friday to lead a “Santa rally” in crypto markets.
After LUNA’s 10% decline to $85 on Thursday, the token went back to its previous high of $96 in early trading hours in Asia. Then an announcement by crypto exchange Binance that it will list UST, a stablecoin issued on the Terra network, pushed LUNA above $100. The price met resistance at that level and was down 5 cents at press time.
![LUNA tokens have seen a monthlong uptrend. (TradingView)](https://www.coindesk.com/resizer/cM0-q_LfJIzYxIV-gepD1pPSdCc=/560x256/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/6SEJOYQ4VBAOZMOL7BTFK4MYL4.png)
Rising prices caused the total value locked (TVL) in decentralized finance (DeFi) protocols on Terra to cross the $21 billion mark, data from analytics tool DeFi Llama showed, making it the largest DeFi network after Ethereum. The figure has grown by almost $3 billion from Wednesday’s $18 billion level.
Of the total, over $9 billion is locked on Anchor, a stablecoin-based yield-generating application. For TerraSwap, a decentralized exchange built with Terra smart contracts, TVL jumped 81% to over $2 billion from last week.
![Top DeFi protocols on Terra by TVL. (DeFI Llama)](https://www.coindesk.com/resizer/VWRBdO8Rv3anegOIaGAapRu5Cxg=/560x259/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/4BDP3MWVJNGENPMPK5YYNFW7LM.png)
DeFi protocols rely on smart contracts instead of middlemen to provide financial services such as lending, borrowing and trading.
The value is split among 13 protocols, or over $1.6 billion per protocol on average. That compares with $73 million per protocol on Binance Smart Chain, the third-largest DeFi network, which has $17 billion locked on 232 protocols.
Some say applications like Anchor add to Terra’s allure for investors.
“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,” Marvin Steinberg, founder of investment firm Steinberg Invest, said in a Telegram message with CoinDesk.
LUNA’s price increase is part of a broader multimonth rally, one buoyed by November′s changes to its token mechanisms – such as a ”burn” feature that periodically decreases supply – and increased activity on DeFi applications built on Terra. That’s propelled LUNA to become the ninth-largest cryptocurrency by market capitalization at $36 billion.