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More than 160 projects will be launched on the South Korean blockchain project Terra by early next year, said co-founder Do Kwon in an interview with Asia Markets.
Terra is an algorithmically governed stablecoin platform with $8.86 billion worth of assets locked in it. According to DeFi Llama, currently, eight primary projects are running on it.
The money market project Anchor currently accounts for 39.3% of Terra’s all TVL at $3.5 billion, followed by Lido ($2.52 bln), Mirror ($1.28 bln), and TerraSwap ($1.14 bln).
But soon, the number of projects on Terra will increase significantly due to a “smooth” upgrade of the Terra network to ‘Columbus-5’ last month, he said.
“Now that Columbus-5 is live, more than 60 projects are preparing to launch in the next six to eight weeks, and more than 100 have recently announced plans (for) the end of the year or early 2022,” Kwon told the publication last week.
The launch of more projects on the platform will “amplify the demand for UST,” he added. TerraUSD (UST) is a stablecoin that attempts to maintain a value of $1 but isn’t backed by US dollars in a bank account; rather, to mint 1 UST, $1 worth of LUNA, the reserve asset of TerraUSD, is burned.
As demand for UST will rise with more projects joining the Terra ecosystem, it will accelerate “the expansion of the stablecoin supply and accruing value to LUNA holders,” Kwon said.
The native token of the protocol LUNA is currently a $14.38 billion market cap cryptocurrency which is up 5,364% YTD but still down 48% from an all-time high of $50 two weeks back.
Columbus-5 has been the most significant upgrade ever since the launch of the Terra protocol, which has been in the works through this year and required numerous upgrades to the Terra core.
This upgrade is expected to help enhance the protocol’s scalability and interoperability. As Kwon said, Columbus-5 also updated “some of the economic mechanics of the protocol so that 100% of seigniorage generated by the expansion of the UST supply is burned, augmenting the per-unit value capture of LUNA as the demand for UST grows.”
Earlier this year, Kwon predicted UST’s market cap to exceed $10 billion by the end of this year, but currently, it stands at only $2.74 billion. Still, according to Kwon, his target is achievable.
Not only dozens of projects have been “anxiously” awaiting Columbus-5’s launch to release their mainnets, he said, adding: regulatory action against the most popular centralized stablecoins like USDC and Tether (USDT) has “reinvigorated the emphasis for a decentralized stablecoin in crypto like UST.”
The founder further pointed out that custodial stablecoin models do not scale well and “serve as hubs of risk in a decentralized financial stack,” as such, he expects the adoption of decentralized stablecoins to only increase from here on.
Additionally, the launch of IBC will enable UST to be exported to any IBC-enabled chain, particularly Cosmos chains and ThorChain, and flow freely outside of Terra. Wormhole support — a cross-chain bridge to Solana, Ethereum, and BSC — meanwhile will allow UST to be ported to the largest chains by TVL.
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