The Terraform protocol seeks to outrun the DAI stablecoin in terms of market capitalization in the next few months with help of the Anchor platform.
Decentralized financial payment network Terraform Labs has launched a new protocol dubbed Anchor to further open up its stablecoin market. Notably, Anchor will be focused on lending besides providing a profitable platform for users to save on the Terraform blockchain.
Consequently, the company expects to create stable demand for its stablecoin TerraUSD (UST). The UST stablecoin has grown exponentially in the past few months to hit and surpass $1 billion in market capitalization. As a result, UST holds the five positions in the stablecoin market in terms of market capitalization according to Binance-backed Coinmarketcap.
The cryptocurrency industry is currently on a general uptrend, thus heightened volatility. A secure means of taking profits along the way is vital for traders. UST seeks to help traders flee from downtown volatility in a secure manner.
Speaking to news outlet CoinDesk, Terraform Labs cofounder Do Kwon stated that the Anchor platform will help UST customers stake in their savings account. “When the market takes a downturn, a lot of those highly volatile crypto assets will be sold off for UST and then staked in Anchor for a savings account,” Kwon noted.
The Terraform protocol seeks to outrun the DAI stablecoin in terms of market capitalization in the next few months with help of the Anchor platform. “If you let Anchor do its run for a couple of months, I think we should be there,” Kwon predicted.
Anchor and Terraform Blockchain
According to metrics provided by CoinGecko, the DAI stablecoin has a market capitalization of approximately $2.83 billion while UST holds $1.16 billion.
According to a post by Coindesk, Anchor will only accept as collateral staked tokens that earn returns. To start with, users can stake the bLUNA token, which is the Terra blockchain’s governance token. Notably, users can borrow up to half of the value staked in their Anchor platform.
The Terraform ecosystem anticipates keeping the Terra LUNA demand high and consequently help holders realize more profits through value addition. According to CoinGecko, Terra (LUNA) was trading around $18.02 having dropped approximately 3.2% in the past 24-hours.
Ranked at position 14 by market cap, the asset has a market capitalization of around $7.5 billion with its past 24-hour trading volume at $1.67 billion.
Worth noting, LUNA jumped over 12949% last year and is now up approximately 217% in the past 30-days. The LUNA tokens are expected to symbiotically assist the UST stablecoin to remain stablecoin at $1.
According to the Terraform developers, when demand for UST gets too high, a new UST gets issued and it can be purchased for $1 in LUNA. On the other hand, If demand weakens for UST, LUNA will be released to the market and exchanged for UST, to be burned.
next