The UST stablecoin, built on the Terra network, has surpassed DAI in market capitalization, becoming the largest decentralized stablecoin in the entire industry.
The TerraUSD (UST) stablecoin, developed in the blockchain from 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 has just surpassed its counterpart Dai (DAI). According to the data According to CoinGecko, UST is the fourth stablecoin by market capitalization, ranking behind Tether, USD Coin, and Binance USD; although these stablecoins are centrally managed.
Source: CoinGecko
Terra developed UST as an algorithmic stablecoin pegged to the US dollar and backed by its cryptocurrency LUNA. The goal of this stablecoin is to mass-market the adoption of blockchain technology and cryptocurrencies, Globally, since the token burning mechanism was adjusted last November, the UST supply has increased by over 300%. Last month, UST had a total issuance of $2.890 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 community of users to promote the use and adoption of new technologies. UST seeks to popularize the adoption of blockchain and cryptocurrencies in global payments and commerce, maintaining the principles established by Bitcoin, the world's first successful cryptocurrency. Through UST, Terra also wants to popularize the adoption of decentralized finance (DeFiUST features a minting algorithm that guarantees stability, transparency, and reliability, making it a strong competitor to other stablecoins in just over a year. In Korea, UST is widely used as an exchange of value, for the purchase of real-world products and objects. Although UST is not the only algorithmic stablecoin being developed within the Terra ecosystem, it is the main stablecoin on 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.
Burning LUNA to mint 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 $4.500 billion at the time of the burn, was used to mint more UST. Prior to this change in the burn mechanism, the LUNA tokens 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 near $82 per unit at the time of this writing. By market capitalization, LUNA ranks ninth in the industry, with over $30.310 billion.
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