Ethereum (CRYPTO: ETH) may be the blockchain network that gave us DeFi, but it's arguably not the most popular DeFi network — if popularity is gauged by actual participation and not enduring hype. In fact, the accepted leader in the space has lost its grasp on the no. 2 spot.
According to Staking Rewards, Terra’s Luna (CRYPTO: LUNA) token has a total staked value of over $26 billion. Solana (CRYPTO: SOL) maintains the top spot with $32 billion staked, pushing Ethereum to no. 3 with $24 billion staked.
The increase in activity has created a 30% rebound for LUNA, down from the December 2021 high of $106.
On March 9, LUNA reached a high of almost $100. Other DeFi networks experienced a similar bump, but it averages around 15% so LUNA does seem to have more fuel in its rockets. At the time of writing, the LUNA token hangs at nearly $94.
What is Terra Labs? Proclaiming themselves, “Programmable money for the Internet, "Terraform Labs was founded in 2018 by Do Kwon and Daniel Shin. The South Korean startup launched Terra blockchain protocol.
According to the website, “Terra is a public blockchain protocol deploying a suite of algorithmic decentralized stablecoins.”
An algorithmic stablecoin is a coin that tracks to the price of a specific asset such as fiat currencies. These stablecoins use a proprietary set of algorithms to maintain the price peg and users can mint the underlying asset by burning Luna.
The Terra protocol utilizes Terra and Luna tokens. Terra features stable coins that create Luna tokens to track to the price of the fiat currency to which they are tethered; TerraUSD, for example, tracks to USD.
What is DeFi? • Decentralized Finance
Luna is the staking token that provides rewards for putting money into the ecosystem. Luna also provides governance on future projects.
Luna can be minted or burned in order to control price. It gets more involved than that, but leave it to say it's a thriving ecosystem with many potential forms of positive interaction and active participation for the community.
So, the community has grown.
More people are staking and becoming validators, but the network ecosystem itself seems healthy and growing. Terra’s leading exchange TerraSwap saw USDT trading of nearly $1.5 billion in the past 30 days.
Terra boasts dozens of projects in its ecosystem, including Play to Earn (P2E) gaming platforms, metaverse, and NFT projects along with loans, lottery, gift cards and investments. Point of fact, it sounds a bit like the counter at a convenience store — but it's commerce. It's happening with real users and active use cases.
Before blockchain ever produces its own Amazon (NASDAQ:AMZN) or Fortnight at scale for a global audience, matters of interoperability will have to be addressed and there's certainly room for more than one player.
But with “alternative DeFi” networks outperforming Ethereum in staking and competitors like Polkadot, Algorand, and Solana, or layer 2 solutions like Polygon actively filling the gaps in functionality that Ethereum leaves, now would be a good time for the “king of DeFi” to show us a little more of what it can do.
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