Terra presents plan to strengthen UST’s position and liquidity

Terra presents a proposal to increase the liquidity of UST through various Ethereum DeFi protocols, in order to make UST the reference stablecoin in the market.

A new proposal from Terra, the protocol that develops the LUNA cryptocurrency and the UST, MNT, and KRT algorithmic stablecoins, was revealed on Tuesday through the official Terra Twitter account.

The post shared by Terra developers proposes to launch a liquidity mining program through decentralized finance protocols (DeFi) What Curve Finance, ConvexFinance, OlympusDAO and others, to strategically increase the liquidity of UST, in order to make it the benchmark stablecoin in the crypto market. Terra’s proposal seeks to position UST above Tether (USDT) and USD Coin (USDC)both stablecoins that dominate the industry by capitalization.

Terra wants to expand the dominance of its UST algorithmic stablecoin through liquidity mining incentives. The creator of the proposal, who presents himself under the pseudonym “Ezaan”, wants to develop a new Liquidity Mining of UST for 6 months within DeFi protocols built on Ethereum, such as Curve Finance, OlympusDAO, Rari Fuse Pools, Convex Finance, Tokemak, among others. Curve Finance is currently the most liquid protocol within the overall decentralized ecosystem.

Terra’s proposal to increase the liquidity of UST, and position the stablecoin in ethereum and criptomercado also includes incentive programs and incentives voting Tokemak + Votemak. The interest income generated by mining liquidity UST will be paid in LUNA, reported in its Ezaan proposal governance.

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Terra’s UST, a rival for USDT and USDC?

Algorithmic stablecoins developed by Terra, linked to currencies other fiduciaries as the US dollar, the Korean won and Mongolian Tugrik seek to provide efficient alternatives to expand the use of blockchain technology and criptomonedas in global payments, stably, transparent and decentralized.

Terra wants to ensure price stability in stablecoins without abandoning the basic principles that established Bitcoin, the world’s first and most important cryptocurrency, since its birth. Thus, in the face of numerous conflicts of opacity and non-compliance that USDT issuer Tether Limited has faced and the regulatory scrutiny that USDC issuer Circle is subjected to, Terra’s UST stablecoin has a lot of potential and room to grow.

UST is currently the 5th stablecoin in the ecosystem, with a market capitalization of $7.6 billion. However, through its plan, Terra will be able to make “UST the benchmark interchain stablecoin.”

Proposal vs Community

So far, the Terra crypto community is discussing the proposal put forward by Ezaan to increase UST liquidity. Some members of the community agree that its implementation could bring great benefits for the growth and consolidation of UST and also for its users, by reducing slippage or slippage that occurs when exchanging UST for other digital assets.

On the other hand, there are those who point out that the benefits of implementing liquidity mining and voting incentives to grow UST in Ethereum are not entirely clear, as well as the way to continue encouraging liquidity after the 6 months indicated. in the proposal.

The biggest DeFi on Ethereum

The proposal highlights that the Curve Finance and Convex Finance protocols are two of the largest that exist on ethereum at the moment.

Curve Finance, developed in the blockchain of ETH and implemented on several highly scalable blockchains, it is known as the DEX of stablecoins. Curve allows users to trade their stablecoins within an intuitive, highly secure and efficient platform. In addition, it also has Uniswap-style liquidity pools or groups, where users can generate interest by depositing their stablecoins as liquidity providers (LP). Currently, the liquidity deposited within Curve Finance exceeds 21,000 million dollars.

On the other hand, Convex Finance is the third largest DeFi ethereum protocol, with total liquidity of more than 15,000 million dollars.

Continue reading: LUNA, the governance token of Terra, is now available on the Bit2Me Wallet