Territorial DeFi protocol surpasses Binance smart chain. Network of decentralized payment systems When it comes to overall value locked in. Terra is now the second-largest blockchain for decentralized finance (DeFi) protocols. After Ethereum (TVL). Terra, the second most valuable cryptocurrency after Ethereum. Has crossed the Binance Smart Chain (BSC) this week.
According to statistics from the analytics platform DeFiLlama. 13 projects on Terra have locked in a total value of more than $18.2 billion. The average cost of a protocol on BSC is above $1.4 billion. Compared to an average cost of $73 million per protocol on BSC. Which has $16.5 billion in contracts for 225 different protocols.
DeFi projects on Terra were valued at $42 million at the end of December 2020. Representing an over 42,000 percent growth in value during that time period.
Ethereum continues its position as the DeFi leader. With a total of $152 billion in value locked inside 361 protocols. When it comes to financial services like lending, trading, and borrowing. DeFi projects rely on smart contracts rather than third-party intermediaries.
DeFi heats up on Terra
Anchor, a savings protocol that offers low-volatile yields on Terra stablecoin deposits. Is at the top of the TVL rankings on Terra right now. Anchor has a market capitalization of about $7.7 billion and represents for 42 percent. Of Terra’s total value locked in. Anchor users get incentives through a diversified stream of staked earnings from major proof-of-stake blockchains. Which are distributed around the network.
Lido, a provider of stranded asset liquidity, is the next company on the list. With over $5.4 billion in TVL. Taking third position is Terraswap. A decentralized exchange (DEX) that has had its TVL soar by more than 95 percent in the last week. According to CoinMarketCap. Terraswap matches peer-to-peer exchanges between users who are using Terra’s smart contracts. To complete the transaction. All liquidity, as is the case on other DEXs, is provided by the users themselves in exchange. For token compensation based on the amount of liquidity. They supply for each trade pair they participate in.
Likewise, the metaverse and gaming programs have left their impact on Terra. Recently launched StarTerra, which bills itself as a gamified launchpad that allows NFT integration. Has locked up $21 million in value, while LoTerra, a decentralized lottery. Reportedly locked up over $311,000 in value, according to CoinMarketCap.
The increase in TVL on Terra coincided with an increase in the value of the company’s LUNA tokens. The cryptocurrency market has seen a 54 percent increase in the past week. Reaching all-time highs of $83 on Tuesday morning, according to statistics from CoinGecko.
Some credit LUNA’s success to its token system and use in DeFi apps
Some believe that LUNA’s success can be attributed to both its token mechanics. And its use in decentralized financial applications. “Terra has recently experienced tremendous growth, both in terms of the value of its LUNA coin. As well as in terms of the TVL on its DeFi protocols. UST, an algorithmic stablecoin on Terra that is minted using (burning) LUNA. Is the primary driver of demand for the LUNA token, according to Adrian Krion. CEO of Web3 game business Spielworks. “UST is the primary driver of demand for the LUNA token,” Krion said.
As he said in a letter to CoinDesk, unlike other layer-1 blockchains,. Terra’s TVL is not primarily driven by swap protocols. But rather by savings protocols that employ so-called bonded tokens. Native LUNA tokens that contribute to the stabilization of the protocol and so create yield and territorial DeFi protocol.
LUNA has been one of the best-performing cryptocurrencies in the previous month. Despite the fact that the overall market has been falling. Since November 2021, bitcoin and ether have traded in a narrow range. But tokens of Ethereum rivals Solana and Avalanche have witnessed gains. As traders bet on the tokens exceeding the territorial DeFi protocol cryptocurrency benchmark Ethereum.
Investing in solana, LUNA, and avalanche is referred to as the ‘SoLunAvax’ trio. By some in the cryptocurrency community, and the trade. Has returned approximately 400 percent since May 2021. When compared to an equally-weighted basket of bitcoin and ether over the same period.