Stablecoins are an integral part of the centralized crypto sector and decentralized finance (DeFi) ecosystems that have emerged over the course of the past few years because they provide the necessary liquidity for traders to easily trade in different assets. They also serve as a refuge against strong negative changes such as 25% fix seen on Dec 3.
One project with a stablecoin component that has seen its price rise to new all-time highs despite the broader market pullback is Terra (LUNA), a multi-sector blockchain protocol aimed at building a global payments system by using of a fiat currency. Linked stablecoin called TerraUSD (UST).
Data of Cointelegraph Markets Pro and TradingView shows since hitting a low of $ 37.86 on Nov 26, LUNA's price has risen 106% to a new all-time high of $ 78.43 on Dec 5 as its 24-hour trading volume shot to a record high. of $ 5.66 billion.
Three reasons for LUNA's price break include increased supply from UST, a series of new cross-chain integrations for the Terra ecosystem, and a rising total value locked (TVL) on the Terra network.
UST Offering Reaches New All-Time High
One of the main drivers of the strength seen in LUNA has been the rapid growth of the circulating supply of UST, which is now the largest algorithmically backed stablecoin on the market and the fourth stablecoin with a market capitalization of $ 8,221,000. millions.
Cryptocurrency proponents in favor of decentralized stablecoin options have embraced the use of UST compared to its more centralized counterparts USD Coin (USDC), Tether (USDT) and Binance USD (BUSD).
Crypto project @terra_money ( $ MOON ) has risen 50% in the last week to hit a new all-time high even with bitcoin down 5%
Your algorithmically backed stablecoin $ UST has become the largest of its kind and continues to gain adoption of Web3 as THE DeFi dollar
Why is that huge ⬇️ 1 / X pic.twitter.com/LSUeA9HgO6
- Zack Guzmán (,) (@zGuz) December 2, 2021
As UST's popularity grows, many in the field have started referring to it as 'The DeFi Dollar' because it embodies the spirit of decentralization and is slowly spreading across the multi-chain DeFi landscape.
Integrations between chains
LUNA is also available through some cross-chain bridges, making it easier for LUNA holders to invest in DeFi ecosystems on Ethereum (ETH), Solana (SUN), Fantom (FTM) and Polygon (MATIC)
In just 6 weeks, users have sent over $ 185mm of $ UST and $ MOON through @crypto . Top destination? @solarium ☀️… Read more about the proliferation of $ UST, energized by @flipsidecrypto rewards program {⛓,} https://t.co/9nWww3dBin
- jack (@forgash_) December 4, 2021
Related: Decentralized Exchange Aggregator Trading Volumes Rise to New Highs
Total value locked in Terra reaches an all-time high
The increasing use of LUNA and UST brought the total value locked on the Terra blockchain to a new all-time high of $ 14.36 billion on December 5 and the price of LUNA hit a record high on the same day.
The rapid rise in TVL has made Terra become the third largest blockchain network in terms of TVL after it surpassed Solana, which is worth $ 12.08 billion locked into its protocol, while the highest ranked Ethereum network It has a TVL of $ 164.72 billion and Binance Smart Chain has a value of $ 22.4 billion locked on its blockchain.
VORTECS ™ data from Cointelegraph Markets Pro began to spot a bullish outlook for LUNA on November 24, ahead of the recent price spike.
The VORTECS ™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements, and trading activity. Twitter
As seen in the chart above, the VORTECS ™ score for LUNA began to rebound on November 24, reaching a high of 85 around the same time that the price began to increase 106% over the next eleven days.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and business move involves risk, you should do your own research when making a decision.
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