LUNA hits a record high and has the ninth largest market value! DeFi's total lock-up volume surpasses BSC, second only to Ethereum

Terra, a public chain project developed by Terraform Labs, a startup team from South Korea, has recently gained strong momentum. Today, it rose 11% to US$81.87, setting a new record high and becoming the ninth largest cryptocurrency by market value. At the same time, the total lock-up value (TVL) of the DeFi protocol on the Terra chain has reached 17.46 billion U.S. dollars, officially surpassing the Binance Smart Chain (BSC) and ranking second in the public chain.

LUNA hits a record high and has the ninth largest market value! DeFi's total lock-up volume surpasses BSC, second only to Ethereum

Luna, the native token of the public chain project Terra, has gained quite a bit recently. According to Tradingview data, the price of Luna rose by 11% to US$81.87 today, setting a new record high. It then fell slightly, and was quoted at $77.63 before the deadline, a 5.3% increase in the past 24 hours.

According to Coinmarketcap data, Luna has risen 31.55% in the past 7 days, pushing its market value to 29.1 billion US dollars, becoming the ninth largest cryptocurrency in market value, surpassing the 10th and 11th public chain projects Avalanche (AVAX) and Polkadot (DOT) .

The Terra ecosystem is booming

Since the beginning of this year, the Terra ecosystem has begun to take shape. Its decentralized investment platform Mirror and fixed-rate lending project Anchor have achieved good development; DefiLlama data shows that the total lock-up value (TVL) of the DeFi protocol on the Terra chain ) Has grown by 37.01% in the past 7 days, reaching $17.46 billion, which has surpassed Binance Smart Chain (BSC) and ranked second in the public chain.

Currently, the top 5 public chains with total lock-up value are Ethereum's 149 billion U.S. dollars, Terra’s 17.46 billion U.S. dollars, Binance Smart Chain’s 16.54 billion U.S. dollars, Avalanche’s 11.67 billion U.S. dollars, and Solana’s 11.61 billion U.S. dollars.

Deflationary pressure boosted currency prices

According to previous reports, unlike other public chains, the Terra protocol comes with its native U.S. dollar stable currency UST (TerraUSD). Therefore, all applications on the chain have the function of stable currency transactions, and the demand for Terra stable currency will increase. Directly increase the demand for Luna.

Since Luna is the native PoS pledge token of the Terra chain, the price of Luna will directly affect the security of the chain, which means that the higher the price of Luna, the higher the economic value that can be safely carried in the Terra chain.

According to previous reports from "Cointelegraph", the Terra ecosystem has volatility absorption characteristics and will burn Luna to maintain its stablecoin price. In other words, assuming that the price of UST is higher than $1, the agreement will burn Luna to generate more UST. So that its currency price will return to 1 U.S. dollar; if the UST price is lower than 1 U.S. dollar, the agreement will exchange UST for LUNA to support its price.

With Terra completed the Columbus-5 mainnet upgrade at the end of September, providing higher scalability and cross-chain, coupled with the Hong Kong venture capital company Chiron Partners announced on the 8th of this month the establishment of a US$50 million fund, In investing in the Terra ecosystem, it is expected that LUNA will face greater deflationary pressure, which in turn will push up the price of the currency.

Coinmarketcap data shows that the market value of UST is growing, from $3 billion in November to $9 billion at present, making it the 21st largest cryptocurrency in market capitalization; TerraAnalytics data shows that since the Columbus-5 mainnet upgrade was completed at the end of September, More than 110 million Luna have been burned so far.