Terra’s Stablecoin UST On Course To Overtake Meme King Dogecoin As LUNA Accelerates ⋆ ZyCrypto

Terra’s algorithmic stablecoin TerraUSD, otherwise known as UST, has become the third-biggest stablecoin by market capitalization after usurping Binance USD (BUSD). At the current market value, UST is close to overtaking the market’s largest meme-inspired cryptocurrency, Dogecoin (DOGE).

Terra’s UST is Now The Third-Largest Stablecoin

Terra UST’s market cap has increased by 16% in the last 30 days to hit $17.57 billion as of publication time, per data from CoinGecko. This value positions UST as the third-largest stablecoin after it supplanted BUSD, which has a slightly lower market cap of $17.46 billion. UST now sits behind stablecoin heavyweights USD Coin (USDC) at $49.9 billion and Tether’s USDT at $82.91 billion.

Moreover, a further upsurge in the UST market capitalization will likely close the $800 million gap between it and Dogecoin (DOGE).

Nonetheless, while UST has flipped BUSD, it appears to be lagging behind its peers in terms of the trading volume. The stablecoin has registered $570 million worth of trading volume over the last 24 hours, while BUSD saw a volume of $4.5 billion during the same timeframe. The lackluster trading volume suggests that UST’s growing market capitalization is related more to its reserves and circulation rather than real demand for the token.

Stablecoins like UST are tokens that are designed to keep their peg to a particular fiat currency and are commonly backed by some kind of collateral. Presently, UST maintains its peg to the United States dollar using LUNA — the governance and staking token behind the Terra network. LUNA reserves are burned when UST’s price moves above a dollar. If the UST’s value climbs above $1, for instance, arbitrageurs can jump in and benefit from the inefficiencies while simultaneously ensuring UST keeps its peg stable.

The Luna Foundation Guard (LFG), a Singapore-based non-profit organization supporting the Terra network, has recently shifted toward backing its stablecoin with Bitcoin instead — which is more liquid, and has a more established market than LUNA. 

Terra Is This Year’s Version Of Corporate Bitcoin Buying

The LFG is notably the newest big-time BTC buyer on the block.

The foundation’s near-term target for Bitcoin reserves is $3 billion. It maintains it will increase this to $10 billion in the foreseeable future by using protocol fees to continue to purchase the cryptocurrency. Terra has accumulated 42,530 BTC so far, worth around $1.658 billion at press time — just 700 BTC less than Tesla’s corporate treasury allocation.

Amid the recent flurry of upbeat announcements in the Terra ecosystem, LUNA has been able to eke out boosts. LUNA is currently the biggest gainer in the top-10 with a 10.2% upsurge in the last 24 hours, changing hands at $88.34, according to CoinMarketCap’s data. It’s the ninth-largest cryptocurrency, boasting a market capitalization of $31.2 billion.