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 measured by actual participation and not sustained hype. In fact, the accepted leader in the space has lost its grip on the no. 2 spot.
According to Staking Rewards, Terra Moon (CRYPTO: LUNA) has a total value of over $26 billion. Solana (CRYPTO:SOL) retains the top spot with $32 billion staked, pushing Ethereum to no. 3 with $24 billion staked.
The increase in activity created a 30% rebound for LUNA, down from the December 2021 high of $106.
On March 9, LUNA hit a high near $100. Other DeFi networks have seen a similar bump, but it averages around 15%, so LUNA seems to have more fuel in its rockets. At the time of writing, the LUNA token is hanging near $94.
What is Terra Labs? Calling itself “Programmable Money for the Internet”, Terraform Labs was founded in 2018 by Do Kwon and Daniel Shin. The South Korean startup launched the 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 the price of a specific asset such as fiat currencies. These stablecoins use a set of proprietary algorithms to maintain price peg and users can hit the underlying asset by burning Luna.
The Terra protocol uses Terra and Luna tokens. Terra offers stablecoins that create Luna tokens to track the price of the fiat currency they are tied to; TerraUSD, for example, tracks the USD.
What is DeFi? • Decentralized finance
Luna is the staking token that offers rewards for investing money in the ecosystem. Luna also provides governance for future projects.
Luna can be hit or burned in order to control the price. It gets more involved than that, but let it be said that it’s a thriving ecosystem with many potential forms of positive interaction and active participation for the community.
Thus, the community grew.
More and more people are staking and becoming validators, but the network ecosystem itself seems healthy and growing. Terra’s main exchange, TerraSwap, has seen USDT trading near $1.5 billion in the past 30 days.
Terra has dozens of projects in its ecosystem, including Play to Earn (P2E) gaming platforms, metaverses, and NFT projects, as well as loans, lotteries, gift cards, and investments. In fact, it looks a bit like the counter of a convenience store, but it’s business. This happens with real users and active use cases.
Before the blockchain produces its own large-scale Amazon or Fortnight for a global audience, interoperability issues will need to be addressed and there is certainly room for more than one player.
But with “Alternative DeFi” networks surpassing Ethereum in staking, and competitors like Polkadot, Algorand, and Solana, or Layer 2 solutions like Polygon actively filling in the functionality gaps left by Ethereum, now would be a good time for the “ King of DeFi” to show us a bit more of what he can do.