DeFi Traders Push Terra’s UST Stablecoin to $10B Market Cap

The coin has surpassed Binance Smart Chain in total value locked amid rapid DeFi growth.

Dec 27, 2021 at 9:50 p.m. UTC
Updated Dec 27, 2021 at 10:01 p.m. UTC

The Terra blockchain’s fast growing stablecoin UST, which had surpassed its rival DAI to become the largest decentralized stablecoin, has how attained another milestone: a market capitalization of $10 billion.

According to the crypto pricing site CoinGecko, the UST market cap pushed past $10 billion on Sunday. As recently as the beginning of 2021, the market capitalization was under $200 million.

Earlier in December, UST overtook rival MakerDao’s decentralized stablecoin DAI, whose market capitalization sits at around $9.4 billion. And DAI has been live since 2017.

The fast growth in UST comes as the Terra blockchain has become a major player in the decentralized finance (DeFi) sector, where stablecoins play a critical role in staking, liquidity management and yield-generating.

Terra’s LUNA token has been one of the top performers among all digital assets this year, jumping 15-fold in price to a reported market capitalization of $34 billion, according to the crypto data site Messari.

Last week, Terra overtook Binance Smart Chain (BSC) for second place in total value locked (TVL), a metric used to compare the DeFi activity occurring on various blockchains or for individual projects. According to data provider DeFi Llama, Terra boasts $17.9 billion in locked assets, versus $17.3 billion for BSC. The Ethereum blockchain sits comfortably in first place with over $162 billion in DeFi total value locked.

The most popular DeFi project in the Terra ecosystem is Anchor, a lending protocol with nearly $9 billion in TVL, accounting for over half of all DeFi activity on Terra.

A popular trade involves users depositing UST into the Anchor protocol, where the tokens are subsequently pooled and lent out to interest-paying borrowers. The accrued interest is then distributed pro rata to all depositors, who expect to earn an annual percentage yield (APY) of 20%.

According to data from TokenInsights, nearly $3 billion of all UST have been deposited into Anchor.


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Tracy Wang is a senior reporter at CoinDesk. She owns BTC, ETH, MINA, ENS, various stablecoins, and some NFTs.

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