Terra’s DeFi Ecosystem Surpasses $20 Billion in TVL as $LUNA Hits New Highs
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The total value locked in decentralized applications built on top of the Terra ecosystem has now surpassed the $20 billion, making it the second-largest decentralized finance ecosystem behind only Ethereum, which has over $159 billion in total value locked.
According to data from DeFiLlama, the total value locked on Terra moved up 55% over the last seven days to hit $21 billion, while the total value locked on Ethereum moved up 7% during the same period. Terra’s rise saw it surpass the value locked on the Binance Smart chain, which over the last week moved up 3.7% to $17 billion.
It’s worth noting that while Ethereum has hundreds of DeFi protocols deployed on top of it and being tracked, while the Binance Smart Chain has 225 and Terra has 13. Anchor ($ANC) leads Terra’s DeFi ecosystem with over $9 billion in total value locked. Data from Delphi Digital shows that at one point it was above $10 billion.
Terra is an open-source blockchain payment platform that accommodates algorithmic stablecoins, the largest one being TerraUSD (UST). It uses a Proof-of-Stake (PoS) consensus algorithm, and its native token LUNA is “used in the issuance of stablecoins (TerraSDRs), as a price stability mechanism, as well as for staking and network governance.”
LUNA is used for governance and staking in the Terra network. Users can stake Luna to become validators on the network and help verify transactions, earning rewards for their work. New stablecoins can be minted by burning LUNA tokens, and stablecoins can be burned to mint LUNA. The protocol uses an algorithmic market module to maintain stablecoins’ stability.
The price of the cryptocurrency has moved up over 28% over the past week to hit a new all-time high close to the $100 mark, according to CryptoCompare data.
As CryptoGlobe reported, year-to-date the price of LUNA has exploded over 10,000% thanks to growing demand for its algorithmically-backed stablecoin UST and to token burns that have removed a significant portion of LUNA’s supply from circulation.
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