Terra’s Stablecoin UST On Course To Overtake Meme King Dogecoin As LUNA Accelerates ⋆ ZyCrypto

Terras LUNA Is Now The Largest Staked Crypto Asset After Edging Out Solana Ether and Cardano

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Terra’s algorithmic stablecoin TerraUSD, also known as UST, has become the third largest stablecoin by market capitalization after appropriating Binance USD (BUSD). At current market value, UST is close to overtaking the largest meme-inspired cryptocurrency, Dogecoin (DOGE).

Terra’s UST is now the third largest stablecoin

Terra UST’s market cap is up 16% in the past 30 days to $17.57 billion as of publishing time, according to data from CoinGecko. This value positions UST as the third-largest stablecoin after it supplanted BUSD, with a slightly lower market cap of $17.46 billion. UST is now behind stablecoin heavyweights USD Coin (USDC) at $49.9 billion and Tether’s USDT at $82.91 billion.

In addition, a further rise in UST market cap is likely to close the $800 million gap between the company and Dogecoin (DOGE).

Nevertheless, even though UST has flipped BUSD, it seems to be lagging behind its competitors in terms of trading volume. The stablecoin has registered trading volume of $570 million in the past 24 hours, while BUSD saw volume of $4.5 billion in the same period. The lackluster trading volume suggests that UST’s growing market cap has more to do with its reserves and circulation than the real demand for the token.

Stablecoins such as UST are tokens designed to hold their peg to a particular fiat currency and are usually backed by some sort of collateral. Currently, UST maintains its peg to the US dollar using LUNA – the governance and staking token behind the Terra network. LUNA reserves are burned when the price of UST rises above a dollar. For example, if the value of the UST rises above $1, arbitrageurs can jump in and take advantage of the inefficiencies while at the same time ensuring that UST keeps its peg stable.

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The Luna Foundation Guard (LFG), a Singapore-based nonprofit that supports the Terra network, recently switched to backing its stablecoin with Bitcoin – which is more liquid and has a more established market than LUNA.

Terra is this year’s version for buying bitcoin for businesses

Notably, the LFG is the latest major BTC buyer around.

The foundation’s short-term goal for Bitcoin reserves is $3 billion. It claims it will increase this to $10 billion in the near future by using protocol fees to continue buying the cryptocurrency. Terra has amassed 42,530 BTC so far, worth about $1,658 billion at the time of writing – just 700 BTC less than Tesla’s corporate treasury allocation.

LUNAUSD Chart by TradingView

Amid the recent spate of cheery announcements across the Terra ecosystem, LUNA has been able to get a boost. LUNA is currently the biggest winner in the top 10 with a 10.2% increase in the last 24 hours, trading hands at $88.34, according to CoinMarketCap data. It is the ninth largest cryptocurrency, with a market cap of $31.2 billion.

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