Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster)

Terra, the fast-growing DeFi tool kit built on Cosmos, is now officially the second-largest ecosystem in decentralized finance. 

According to data pulled from DeFi Llama, Terra currently boasts total value locked (TVL) of just over $23 billion, marking an all-time high in U.S. dollar terms. 

This is roughly twice as much as runners-up BNB Chain (formerly Binance Smart Chain) and Fantom. The king chain, Ethereum, still dominates 54% of the entire DeFi market, commanding $111 billion.

Total TVL on Terra in USD. Source: DeFi Llama.

But if we switch our chart over to TVL expressed in LUNA, the Terra network’s native token used to pay transaction fees and vote on governance, the picture’s a bit different. 

Instead, the recent spike looks more like a minor blip compared to activity last summer. 

Total TVL on Terra in LUNA. Source: DeFi Llama.

This indicates that alongside an uptick in actual activity (folks pouring crypto into the network to do fun DeFi things), the primary motor for the network has been the mooning price of LUNA.   

CoinGecko shows that LUNA has risen by nearly 38.8% over the past week. Over the same period, the native token behind Terra’s largest DeFi project, Anchor Protocol (ANC), also soared by more than 70%. Anchor is a money market akin to Ethereum’s Aave, where users can earn up to 19.49% on their UST (Terra’s algorithmic, USD-pegged stablecoin). 

So, there’s lots of price action giving the Terra ecosystem a hefty boost. The reasons for the latest boost are…

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