UST, one of the Terra Project’s stablecoins, has grown to become the largest stablecoin by market cap today, having overtaken its Ethereum-based rival DAI. UST is now the largest decentralized stablecoin in the market, completing a year of growth for the Terra ecosystem, which is now one of the most valuable top ten cryptocurrency projects out there.
UST issues DAI as the most valuable decentralized stablecoin
UST, one of the stablecoins from the Terra project, has will the most valuable project of its kind by market capitalization and takes the place that DAI, another decentralized stablecoin, once held. This ends a year of growth for the Terra ecosystem and for UST, the managed swell from a market cap of $ 182 million in early 2021 to more than $ 9 billion in December.
Now UST is consolidating its new position as the fourth stablecoin with the highest market capitalization behind USDT, USDC and BUSD, all centralized stablecoins. While these work by placing collateral to back up the tokens in the market, UST is an algorithmic stablecoin that uses another Terra Ecosystem (LUNA) token to offset its peg to the value of the US dollar.
Other decentralized stablecoins and LUNA have also grown
In the past 30 days, other decentralized stablecoins have also grown in terms of market capitalization. Tokens like Frax and MIM have gained more than 30%, with FRAX even reaching 40% in terms of market capitalization. These decentralized tokens do not depend on a central issuing point and cannot be blocked by a central authority.
Due to the increased attention that the rise of stablecoins like USDT and USDC face Regulators, there are some who believe that these alternative stablecoins will see further growth, with users flocking to these alternatives for a number of reasons. But despite all this growth USDT is still most of it Second hand Stablecoin on the exchanges, with the token changing hands yesterday, valued at more than $ 68 billion.
The rise in UST has also driven the price of LUNA, its sibling token, to ATH levels. In order to mint UST, users of the Terra Protocol must burn LUNA, which makes the token more scarce. LUNA’s price rose from just over $ 0.64 this January to more than $ 80 today, a 125-fold increase in less than a year.
Do Kwon, Founder and CEO of Terraform Labs has explained he will propose a backup for UST in the form of Bitcoin (BTC) and other cryptocurrencies that use the token governance method to protect their peg from volatility during stressful times in the market.
What do you think of UST DAI reversing as the decentralized stablecoin with the largest market cap? Let us know in the comments section below.
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Source: Crypto News Austria