Terra’s UST becomes the first decentralized stablecoin to reach a market cap of $ 10 billion
Without a doubt, one of the most significant areas of growth in the crypto space this year is the stablecoins market. In fact, according to a report, the biggest stablecoin issuers have grown 500% in the past 12 months. UST, one of the stable pieces of the Terra ecosystem, has recorded impressive numbers in this area.
It toppled DAI’s reign as the largest decentralized stablecoin by market cap, making it one of the top 22 crypto projects by market cap.
Terra USD / UST also added to its market dominance with a share increase from 0.67% to over 6% in 2021, with hardly any stock exchange listing. Do Kwon, the founder of the Korean blockchain project Terra, estimates that demand for his US dollar-pegged stablecoin could increase “rapidly” in early 2022.
Well, looks like the party might have started early.
UST’s market cap was around $ 200 million at the start of 2021. Fast forward to December 2021 and the market cap value is around the $ 10 billion mark.
Ergo is now the first decentralized stablecoin to take this step. This implies that UST has grown 5 times higher since the start of the year.
$ UST the market cap is now $ 10 billion, the first decentralized stablecoin to take this step.
There is no longer any doubt as to the adequacy of decentralized money for the product market in decentralized economies.
– Do Kwon 🌕 (@stablekwon) December 26, 2021
Now, even though UST ranks # 1 in decentralized stablecoins, it still lags behind more well-known centralized competitors like USDT, USDC, and BUSD. Nonetheless, it continues to make significant progress in closing this gap.
Two leading exchanges in terms of volume traded have included UST on their platforms. Huobi, an Asian exchange, announced that it will include the asset in its pioneer zone on December 23. Binance also reported the stablecoin listing on the same day, stating that it will offer three different UST trading pairs: UST / BTC, UST / BUSD and UST / USDT.
Right after Binance’s announcement, over 200 million USTs were issued.
This, depending on the token issuance dynamics, could have influenced the increase in the price of LUNA (Terra’s native token).
The price of LUNA has a direct positive correlation with the increase in supply of UST. Consider the graph below, for example, which on December 26 looked like,
At time of printing, LUNA was trading just below the $ 100 mark (+ 3.5%). But, with the demand for UST growing exponentially, $ 100 LUNA is just another milestone, not the goal. In terms of total locked-in value, the network passed the $ 21 billion mark, just behind ETH.
(Terra’s TVL is supercharged because every dollar coming in comes in the form of native tokens or USTs. equals to buy snap for native token or LUNA engraving.)
Altcoin has caught the attention of serious investors. Not so long ago, analyst Michaël van de Poppe shared his bullish scenario for the same. Projecting a 2x to 10x surge, he estimated,
“LUNA is currently one of the strongest assets in the crypto market. Not only LUNA, but also AVAX (Avalanche), MATIC (Polygon) work very well.
Another person predicted a rise of 10 or more in the coming year, thanks to the increasing adoption of UST and LUNA burns.
$ LUNA in 2021: $ 1 on January 26; $ 10 on March 08 (and 2nd time on July 28); $ 100 on Dec. 24 $ UST adoption & LUNA burn is just beginning. Does anyone really think that another 10X or more in the LUNA 2022 price is not possible? pic.twitter.com/stXbvDZoLO
– Murray Rudd (@crypto_rudd) December 24, 2021
Well, sometimes the projections can get too ambitious. However, this time it could turn out different.