The layer one has blossomed into a blue-chip proposition comfortably positioned in the top 20 projects by market cap.
In this article, we’ll look at some of the exciting new developments coming up on the platform, including the huge Columbus 5 upgrade. This is the return to Terra.
Making a clear bet on alternative layer ones can be tough these days. As there’s just so much noise competing for your attention and as we saw with Avalanche last week, however.
It is possible to find points of differentiation to help order them in your mind now while eth has become a platform for everything literally.
What Is Terra
Terra is of particular interest to us because it has been at least a DeFi focused layer one until now. Thus, allowing you and me to save, invest and spend in ways that are becoming increasingly innovative.
The core protocols Mirror, Anchor, Chai, and Terra, Swap powered by ust form the backbone of a ferocious financial engine that has seen nothing short of spectacular growth this year.
Tvl on Terra 7.3 billion dollars and alongside that an ecosystem that isn’t as obviously stacked as some other layer ones. But it’s precisely this focus that makes Terra so appealing.
So it’s easy to look at Terra, but back in spring, when the market suffered that heavy collapse, Terra suffered a catastrophic series of liquidations as ust lost its peg, dropping below 90 cents before eventually recovering.
Back then, we investigated how we could play the borrowing side of the Anchor money market to take advantage of the incentives on offer to bring the system back into balance.
How It works
To understand the Terra ecosystem, you really have to get to grips with the relationship between Luna, the native protocol token, and ust the algos stable coin that powers so much of the value exchange in the ecosystem.
Luna serves as a foundational asset for the entire Terra network and the ecosystem. It locks value into the system through staking with rewards commensurate with the risk of long exposure to such a volatile asset.
It’s also used in governance, but its most powerful connection is to Terra’s stablecoin ust. A ust is an algorithmic, interchange yield-bearing asset pegged to the value of one u.s dollar ust.
It uses Luna as a reserve asset if you want to mint one Terra usd, one dollar worth of Luna token is burned out of the system. And this means whenever ust supply increases, Luna’s price goes up. Read More...