The UST stablecoin, built on the Terra network, has overtaken DAI in market capitalization, becoming the largest decentralized stablecoin in the entire industry.
The TerraUSD (UST) stablecoin, developed in the blockchain de Terra and officially launched in September last year, it has become the largest decentralized stablecoin in the crypto industry. With a market cap of $9.168 billion currently, UST just outperformed its Dai counterpart (ICD). According to data from CoinGecko, UST is the fourth stablecoin by market cap, behind Tether, USD Coin and Binance USD; although these stablecoins are centrally managed.
Terra developed UST as an algorithmic stablecoin pegged to the US dollar and backed by its LUNA cryptocurrency. The objective of this stablecoin is to massify the adoption of blockchain technology and cryptocurrencies globally. Since the adjustment in the token burn mechanism last November, the supply of UST has increased by more than 300%. Last month, UST had a total issuance of $2.89 billion.
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What is UST?
TerraUSD is the decentralized and algorithmic stablecoin of the Terra blockchain, developed to offer a scalable, interoperable and secure solution to its user community to drive the use and adoption of new technologies. UST seeks to massify the adoption of blockchain and cryptocurrencies in payments and global commerce, maintaining the principles established by Bitcoin, the world’s first successful cryptocurrency. Through UST, Terra also wants to massify the adoption of decentralized finance (DeFi). UST has a minting algorithm that guarantees stability, transparency and reliability, which is why it has become a strong competitor to other stablecoins in just over a year. In Korea, UST is widely used as a value exchange, for the purchase of real-world goods and objects. Although UST is not the only algorithmic stablecoin that is developed within the Terra ecosystem, it is the main stablecoin of this blockchain.
At the beginning of the month, the Terra community proposed a liquidity mining plan to position UST as the benchmark stablecoin in the crypto industry.
LUNA burning to coin UST
In mid-November, the Terra community voted in favor of a proposal to burn nearly 89 million LUNA tokens, the native cryptocurrency of the Terra network, over a two-week period. The amount of LUNA to be burned, equivalent to about $4.5 billion at the time of the burn, was used to mint more UST. Prior to this change in the burning mechanism, the LUNA cryptocurrencies used to mint UST were sent to a fund to support the development of projects related to the Terra ecosystem.
In the last month, LUNA has grown by more than 80%, trading close to 82 dollars per unit at the time of this edition. By market capitalization, LUNA ranks as the ninth cryptocurrency in the industry, with more than 30.31 billion dollars.
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