After surpassing its Ethereum-based counterpart, DAI, UST has now become the biggest stablecoin in terms of market capitalization. UST has become the biggest decentralized stablecoin on the market. This marks the end of a successful year for Terra’s ecosystem. It is also one of the top ten most valued cryptocurrency projects.
UST Flips DAI as The Most Valuable and Decentralized Stablecoin
UST has surpassed DAI as the market capitalization for the Terra stablecoin. This marks the end of a successful year for both the Terra ecosystem as well as UST. UST’s market capitalization grew from $182 million in 2021 to $9 billion by December.
UST is now the fourth most traded stablecoin after USDT and USDC. While these work by depositing collateral to back the tokens in the market, UST is an algorithmic stablecoin that uses another token of the Terra ecosystem (LUNA) to balance its peg against the U.S. dollar’s value.
Additional Decentralized Stablecoins, LUNA and Other Grew Also
Other decentralized stablecoins also saw a rise in market capitalization over the past 30 days. Frax and MIM have gained over 30%. FRAX reached 40% of its market cap. They are not dependent on any centralized point for issuance, and can’t be stopped by a central authority.
Many believe the growth of alternative stablecoins USDT and USDC is due to increased regulator attention. This has led to some believing that these stablecoins may experience more growth. There are many reasons why users will flock to them. With more than $68 Billion worth of USDT changing hands last week, USDT continues to be the most widely used stablecoin.
The price of LUNA’s sibling token, UST, has also risen due to the rise in UST. Users in Terra protocols must burn LUNA to make UST. This makes the token less common. LUNA’s price rose from a little more than $0.64 this January to more than $80 dollars today, a 125x growth in less than a year.
Terraform Labs founder Do Kwon has stated that he would propose to create a back-up for UST using bitcoin (BTC), and other cryptocurrencies through the token governance process. This will help to protect the peg against volatility in stressful market times.
How do you feel about UST Flipping DAI, the largest decentralized stablecoin market capital? Please leave your comments below.
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