Terra’s UST cryptocurrency is now the 3rd largest stablecoin but one thing to note!
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Answer Terra’s UST cryptocurrency is now the 3rd largest stablecoin but one thing to note!
TerraUSD (UST) recently overtaken Binance’s BUSD stablecoin in terms of total market capitalization, becoming the third largest stablecoin.
The total market capitalization of UST is now $17.52 billion, slightly higher than BUSD’s $17.49 billion.
As indicated in the title of the article, despite UST solutions being third in terms of total market capitalization among their stablecoin peers, actual UST trading appears to lag behind its peers, with 24-hour trading volumes reaching Only $261 million, which is the fifth highest among the major stablecoins.
UST trading volumes were lower than those seen in the leading digital stablecoins USDT and USDC, and even lagging behind their smaller peers such as BUSD and DAI, according to Coinmarketcap data.Read:Binance intends to compete with Ethereum by launching a new blockchain…. Details here
The volumes indicate that the increasing market value of the digital currency UST is more related to its reserves, as opposed to the actual demand for the digital currency.
Currently, the Anchor Protocol (ANC), Terra’s largest DeFi platform, holds nearly two-thirds of UST’s supply.
Why has the UST stablecoin market cap increased?
The Luna Foundation Guard (LFG) has been steadily increasing the reserve backing the UST digital stablecoin.
One of the key aspects of this is the burning of LUNA to UST, a digital stablecoin mint.
Given that UST has a fixed 1:1 correlation against the dollar, creating more coins does not directly affect their price.
Instead, minting UST tends to increase the market value of the coin, contrary to the usual deflationary effects of creating new digital tokens.
Data from Terra Analytics shows that over the past week, the total supply of UST has increased by nearly 800 million UST, corresponding to a jump of $800 million in total market value.Read:The Stellar currency rose by 20% after it was announced that half of its supplies were burned
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