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Terra becomes second-largest DeFi protocol

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The Terra (LUNA) decentralized finance (DeFi) ecosystem has surpassed Binance Smart Chain (BSC) in terms of total value locked (TVL). Furthermore, the figure exceeded $18.4 billion.

Thus, Terra is now the second-largest blockchain, behind Ethereum (ETH).

Compared to December 2020, TVL has grown by 42,000%. A year ago, the number of funds blocked in the Terra ecosystem was $42 million. According to DeFi Llama, the ecosystem consists of 13 projects. The largest of them is Anchor, whose TVL is $7.79 billion.

The algorithmic UST stablecoin, secured by LUNA token

The key element of Terra is the algorithmic UST stablecoin, secured by the native LUNA token. Moreover, the growth of the latter in 7 days was 58.3%, according to CoinGecko.

Founded in 2018 by Do Kwon and Daniel Shin, the Terra project is one of the leading e-commerce companies in South Korea. In July, Terraform Labs, the company behind Terra, raised $150 million for an investment fund focused on ecosystem development.

In addition, the project supports stablecoins pegged to the US dollar, South Korean won, Mongolian tugrik and Special Drawing Rights (SDR). The LUNA token is used to manage and ensure the stability of the prices of assets issued on the network. Users themselves issue stablecoins while burning native tokens.

Top ten ratings of market capitalization

LUNA can also be used for protocol management, staking, liquidity mining and payment of transaction fees.  The other day, the LUNA/UST pair appeared on the Injective cross-chain derivatives platform. UST and LUNA have also recently integrated the Multichain (formerly Anyswap) cross-chain platform.

The recently launched StarTerra service is also gaining popularity for launching projects focused on GameFi and non-fungible tokens (NFTs). Therefore, the platform’s TVL exceeded $20 billion.

In early December, the Terra (LUNA) protocol token broke into the top ten ratings of market capitalization.

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