The native currency by the eponymous blockchain network Terra, LUNA, surpassed Solana amid the Wednesday session to be the 6-largest crypto asset by market cap. Moreover, Terra touched record highs as its decentralized finance (DeFi) adoption surged.
LUNA gained approximately 5%, briefly touching the ATHs of $119.1, its market cap hovering around the $41.3 billion mark. Experts attribute the latest surge to Binance introducing UST staking at about 20% yield.
Terra has seen remarkable uptrends since touching its yearly lows in February 2022. The increasing UST popularity and Terra blockchain dominating the decentralized finance (DeFi) market fueled the token’s upswings.
DeFi Growth Driving LUNA Surges
Terra’s popularity within the DeFi market strengthened as the community combined efforts to ensure liquidity. For now, Terra ranks second in DeFi blockchains as far as total value locked (TVL) is concerned. LUNA’s TVL hovers around the $21 billion mark.
That also boosted LUNA usage as the primary transacting medium within the chain. Terra’s ANC (Anchor Protocol) also saw increased popularity as it offered the highest yields in decentralized finance, at around 20%. Though the network voted to decrease the yields, it commands more than $16 billion in total value locked, ranking 3rd among DeFi networks.
Moreover, the Terra community burns LUNA tokens while minting UST, reducing LUNA’s supply while boosting its price. Terra Analytics data shows about three millions coin burnt within the last five days. That had Terra’s total supply dropping to record lows of around 351 million.
Terra Targets Stablecoin Dominance
Do Know, Terra founder has consistently declared his objective to make UST a leading stablecoin in the market. That had the Terra community acquiring BTC for UST reserve needs. That enhances LUNA’s popularity.
TerraUSD is a leading algorithmically-supported stablecoin that uses different tokenomics and reserves to keep its dollar tie.
Kwon plans to accumulate BTC worth $10 billion for reserve. That would be lucrative for LUNA as it guarantees adequate liquidity for Terra’s decentralized finance protocols. So far, the platform has purchased about $3B worth of $BTC.
LUNA surpasses Solana’s market cap by a small margin, and SOL might reclaim its sixth spot before the day ends.
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