Terra (LUNA) is in full expansion with over $11.9 billion in TVL 🚨 This article is 3 years old...
Terra (LUNA) is in full expansion with over $11.9 billion in TVL
The project that started as an innovative take on stablecoins is now an industry powerhouse.
3 min read
Updated: Dec. 1, 2021 at 5:48 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Blockchain project Terra and its native token LUNA have quickly moved from the sidelines to the forefront of DeFi. With over $11.9 billion in TVL, it’s the fifth largest blockchain project, trailing closely behind Avalanche.
With several major fundamental developments underway, LUNA saw its price increase by over 50% in the past week, with industry insiders believing that this is just the start of a major bull run set to take place in the following weeks.
What’s behind LUNA’s major rally?
After Bitcoin took a massive hit last week, dropping dangerously close to its coveted $50,000 resistance levels, the rest of the market went into the red alongside it. However, the major drag downwards doesn’t seem to have affected LUNA, the native token of the Terra blockchain.
The Layer-1 blockchain platform has quickly risen from the sidelines to the forefront of DeFi, riding a wave of extreme interest in its innovative stablecoin products. Terra enables users to swap their LUNA tokens for a wide variety of stablecoins pegged to different fiat currencies. As minting $1 worth of UST requires burning $1 worth of LUNA, an increasing supply of stablecoins on Terra decreases the circulating supply of LUNA, thus raising its value.
This simple proposal has led to over 3.2 million registered accounts and 15.3 million UST in tax rewards distributed in the past year.
Earlier this month, the Terra community passed a proposal to burn 88.7 million LUNA tokens, worth roughly $4.5 billion at the time. The burn was initiated to mint between 4 and 5 million terraUSD (UST), a decision analysts believe would further boost interest in Terra.
And boost interest it did—the token saw its price increase by over 50% since last week, fueled mostly by a slew of new proposals set to be approved by the community.
The ultimate goal for all of the recently submitted proposals is to have UST become the go-to interchain stablecoin. This process is set to begin by increasing UST liquidity on Curve Finance, Ethereum’s premier AMM for stablecoin swaps, through a 6-month incentive plan through several Terra apps.
1/ A new proposal to significantly increase $UST liquidity on @CurveFinance pools via a 6-month incentive plan through @VotiumProtocol, @ConvexFinance, and @TokenReactor is now posted on Agora 👇https://t.co/PiUnSqWUCw
— Terra (UST) 🌍 Powered by LUNA 🌕 (@terra_money) November 30, 2021
All of the previous LUNA burns have caused a huge increase in the annualized staking return for the token, which jumped from 4.61% at the beginning of November to 10.74% at the end of the month.
According to Nicholas Flamel, one of the more prominent Terra community members, we are about to see an even bigger increase in LUNA’s price in the coming weeks.
“The Terra economy is in full expansion,” he told CryptoSlate. “I’m fairly confident that we have seen nothing yet.”
Flamel said that both the Terra community and its development team anticipate that UST will reach $10 billion in market capitalization by the end of the year. And as minting 1 UST requires burning $1 worth of LUNA, the Terra ecosystem is about to go parabolic.
“This means we will have to buy/burn around $2.5 billion worth of LUNA in the next 4 weeks. This is big. I’m not sure we have ever seen such massive buying pressure incoming on a coin like this before.”
Terra Market Data
At the time of press 5:48 pm UTC on Dec. 1, 2021, Terra is ranked #13 by market cap and the price is up 7.5% over the past 24 hours. Terra has a market capitalization of $24.37 billion with a 24-hour trading volume of $2.19 billion. Learn more about Terra ›
Crypto Market Summary
At the time of press 5:48 pm UTC on Dec. 1, 2021, the total crypto market is valued at at $2.68 trillion with a 24-hour volume of $119.81 billion. Bitcoin dominance is currently at 41.16%. Learn more about the crypto market ›
Mentioned in this article
Author 
Andjela Radmilac
Armed with a classical education and an eye for news, Andjela dove head deep into the crypto industry in 2018 after spending years covering politics.
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Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems.
TerraClassicUSD
$0.02113
TerraUSD (UST) is a decentralized and algorithmic stablecoin on the Terra blockchain.