BUSINESS

UST Flips Binance Chain To Become Third Most Valuable Stablecoin

UST, the Terra blockchain’s native programmable stablecoin, has flipped the Binance Chain native stablecoin, the BUSD, to become the third most valuable stablecoin with a market capitalization of approximately $17.5 billion.

TerraUSD (UST) is known to be a decentralized and algorithmic stablecoin of the Terra blockchain. It touts to be a scalable, yield-bearing coin that is value-pegged to the United States Dollar. It was launched in September 2020 and its minting mechanism requires a user to burn a reserve asset such as LUNA to mint an equivalent amount of UST.

According to statistics from CoinMarketCap, UST’s total market capitalization has gained approximately 14.5% over the past 30 days, from $15.31 billion to currently standing at $17.5 billion at the time of writing.

The flipping happened yesterday, with UST gaining 0.69% yesterday from $17.39 billion to stand at $17.5 billion. BUSD’s market capitalization currently trades at $17.46 billion.

The asset now trailing only behind industry giants Tether (USDT), which market capitalization currently stands at $82.8 billion and USD Coin (USDC), with a market capitalization of $50 billion.

Although UST began trading in late 2020, the meteoric rise in its popularity and ultimately market capitalization began in November 2021. Since then, the market capitalization has grown by a whopping 525% in just 5 months.

NewsBeatng reports that despite flipping BUSD in terms of market capitalization, UST is trading in volumes well below its immediate competitor, with Binance’s stablecoin seeing $3.2 billion worth of trading volume over the past 24 hours compared to UST’s $354 million. This means UST trading volume is about 11% of that of BUSD.

ALSO READ  FG To Promote Digital Economy, Sustainable Inclusive Development- Finance Minister

The reason for the growth in market capitalization of the programmable stablecoin is due to the promise made by co-founder Do Kwon, who vowed that the project will accrue a whopping $10 billion worth of Bitcoin (BTC) to back its UST reserves.

So far, the Terra foundation has bought 42,530.83 BTC worth approximately $1.65 billion to back its stablecoin. According to Do Kwon, the foundation would purchase $3 billion in the short term and the remaining $7 billion at a later future date, with no specific dates outlined.

According to Bit Info Charts, the wallet address has been accumulating Bitcoin since January 2022 and has increased its holding significantly since the 22nd day of March 2022. The wallet address is now #18 on the richest Bitcoin wallet list.

A major reason to hold the UST stablecoin is the opportunity for holders to gain passive income using TerraUSD with the Anchor protocol’s stable interest rates. Anchor is a lending protocol that promises a 20% return on UST savings.

Much like the wider crypto market of late, however, bullish announcements are doing little to push the price of LUNA upwards. The token’s price is down 35.66% from its all-time high of $119.18 it created nearly 2 weeks ago as it currently trades $76.68 as of the time of this writing.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button