Terra (LUNA-USD) has built a name for itself as a major force within decentralized finance. Now, it is reaching new milestones, celebrating its growth and inviting new money into the ecosystem. LUNA crypto holders are brimming with joy Monday as the coin is one of the only cryptocurrencies trading in the green today.
Last April, the LUNA market capitalization stood at just $5 billion. Over the past 12 months, it has shown some of the strongest growth of any player on the market. Today, this market cap has bloomed to over $30 billion and brought LUNA into the top 10 projects in the world.
Much of this success can be attributed to the TerraUSD (UST-USD) token which underlies the Terra ecosystem. A dollar-pegged stablecoin, UST fuels Terra’s DeFi world; users can take their UST holdings and lend, stake or liquidity farm them for passive income. There is also the interesting use for it as a means for seigniorage.
Indeed, users can burn or mint LUNA in order to keep UST pegged at $1, since the two currencies’ total supplies are fluid and linked with one another.
LUNA Crypto Keeps Prices Up Thanks to UST Milestone
Terra has been in the spotlight recently thanks to hardships that the UST stablecoin had faced. Now, as developers remedy the damage, UST appears to be excelling. This is helping the LUNA crypto to keep its own prices high.
The beginning of the year saw UST thrown from its dollar peg. Drama sprouted up around a Terra DeFi platform and drove masses of investors from the ecosystem; the movement was enough to shake UST prices below 70 cents.
In an attempt to prevent future volatility, Terra developers are buying up billions of dollars in Bitcoin (BTC-USD) to help underlie the stablecoin. With $1.7 billion in BTC on its balance sheet today, the project is well on its way to owning its goal of $10 billion. Project leads are not stopping there either; recent days have seen the company purchasing over $100 million worth of AVAX, the coin underlying layer-1 competitor Avalanche (AVAX-USD).
The aggressive buying and moves to bulk up the UST asset are paying off in dividends. Now, the token holds a market cap of over $17.5 billion. And today, the project is celebrating as UST passes Binance USD (BUSD-USD) as the third-largest stablecoin in the world.
Given that UST is such an important aspect of the Terra ecosystem, the news is helping to drive investors toward both UST and the LUNA crypto. About $2.6 billion in LUNA has swapped hands over the past 24 hours, helping to push prices up by 5%. This makes LUNA one of the only top-25 cryptos trading in the green today.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.