Terra’s $ 139 Million Proposal “Will Bring Incredible UST Use Cases For DeFi Projects”

The decentralized stablecoin issuer Terra has made an ambitious proposal to expand the interchain use of its stablecoin TerraUSD (UST) through five projects to Ethereum, Polygon and Solana.

Terra Research’s Thursday post “UST Goes Interchain: Degen Strats Part Three” details how the $ 139 million UST and Terra’s native stablecoin LUNA would be used., and on which platforms, if the proposal is approved.

Terra is a blockchain that delivers algorithmic stablecoins, and LUNA has a market cap of $ 28.5 billion.

Terra’s $ 139 Million Proposal “Will Bring Incredible UST Use Cases For DeFi Projects”
Terra’s $ 139 Million Proposal “Will Bring Incredible UST Use Cases For DeFi Projects”

For each proposed deployment, Terra UST would deposit UST in variable amounts between $ 250,000 and $ 50 million to promote the stability of each of the new affiliated projects.. The main goal is to “bring impressive UST use cases to Ethereum DeFi”. A vote on government officials will take place later to approve the proposal.

Terra founder Do Kwon made it clear in a December 21 tweet that wishes Make UST the dominant stablecoin in the cryptocurrency market. The distribution is intended to help Terra accelerate its market cap increase efforts. Currently, only Binance USD (BUSD) (USD 14 billion), USD Coin (USDC) (USD 43 billion) and Tether (USDT) ((USD 78 billion) stablecoins have a market capitalization of more than UST (10.3 billion USD) . USD).).

Decentralized financial liquidity provider (DeFi) and market maker Tokemak on Ethereum would receive a deposit of $ 50 million in UST for at least six months if the proposal is approved.

The Rari Fuse credit and lending platform would receive $ 20 million in UST over six months. The funds would be deposited into three pools at Fuse to help UST become the “cheapest stall to borrow” in Fuse.

The yield aggregator Convex Finance on Ethereum would receive $ 18 million over six months. Terra would provide greater incentives from LUNA to the liquidity providers in various platform pools that use UST. Convex is one of DeFi’s largest performance aggregators with a market cap of $ 1.9 billion.

OlympusDAO®’s Decentralized Reserve Currency Protocol (OHM) is already connected to Terra and will launch gOHM, a packaged version of OHM, on Terra. The Olympus proposal includes a $ 1.425 million commitment of $ 694 million of $ 1 million in UST bonds held “forever” with the Treasury and $ 425,000 in LUNA three-month incentives .

InvictusDAO is a fork of OlympusDAO in the Solana network. Terra would step up its expansion in Solana by contributing $ 250,000 in UST to create IN / UST bonds. Frax Finance will offset Terra’s bond contribution with $ 250,000 in FRAX tokens, according to an AMA on Thursday.

USDC and USDT, the two largest stablecoins by market capitalization, currently hold the project’s major treasury holdings of $ 71 million. The InvictusDAO team were optimistic about the partnership with Terra and said at the AMA:

• Holding UST helps resolve structural treasury problems as we do not want to increase our USDC and USDT holdings as this creates centralized risk. UST helps increase the treasury and the number of bonds we can sell. ”

A representative from InvictusDAO told Cointelegraph that The proposed partnership would help the Solana ecosystem: “With the chain so dominated by centralized USDC / USDT stablecoins, I believe that the introduction of high quality cross-chain stablecoins will benefit the ecosystem immensely.”

At the time of this writing, the proposal seemed to have strong support from government officials in Terra.

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