On-chain demand for Terra (LUNA) is mainly generated by the top two protocols, Anchor and Mirror. While Mirror allows synthetic asset trading, Anchor enables high-yield savings, offering an attractive 20% annual percentage yield (APY) on TerraUSD (UST).
Third lending protocol by TVL
Only days after the anticipated Columbus-5 upgrade that brought cross-chain interoperability to the network went live, and the Anchor’s entire product suite was announced “stable and available” for everybody to interact with, the protocol hit $5 billion in TVL.
— Jason Wang (@jwang815) October 4, 2021
Despite the number of funds locked in, Anchor dropped slightly below $4 billion shortly after. The protocol still remains the third lending DeFi protocol based on the TVL metric, following Aave and Compound, with $13,9 billion and $9,9 billion in TVL, respectively, according to DeFi Llama’s data.
Anchor’s deposits increased alongside UST‘s market cap, reflecting the growth of Terra’s user base, but as Terra’s ecosystem continues expanding, its users will venture out, searching for more means of utilizing their UST.
LUNA keeps rallying
UST is an algorithmic stablecoin, which leverages Terra’s utility token, LUNA while maintaining a nearly equal value to the US dollar. It is currently the fifth-largest stablecoin with a $2,68 billion market cap.
LUNA is minted when the demand for UST drops and is burned when the demand for the stablecoin rises.
1/ Columbus-5 is now officially live as the new Terra mainnet!
Welcome to the future of Terra https://t.co/EFnQnFr2lB
— Terra (UST) Powered by LUNA (@terra_money) September 30, 2021
Thanks to the upgrade, data can be shared between Terra and other Cosmos-integrated blockchains, which is expected to further boost the demand for LUNA and UST, consequently increasing the native token’s price.
Following the upgrade, LUNA’s price is rallying, as the token continues recording new all-time highs.
— Vic (@Vdhnyc) October 4, 2021
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