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Terra will expand UST and LUNA, and Aave Arc seeks institutional adoption, from December 31 to January 7

Terra will expand UST and LUNA, and Aave Arc seeks institutional adoption, from December 31 to January 7

Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.

The new year is upon us and expectations for DeFi innovation, utility, and widespread adoption are higher than ever. Read on for the inaugural stories of 2022.

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Terra Research proposes a new utility for TerraUSD and LUNA

Decentralized algorithmic stablecoin issuer Terra published an ambitious proposal through its research team this week to expand the cross-chain deployment of its TerraUSD (UST) stablecoin across five projects in Ethereum, Polygon and Solana.

Titled “UST Goes Interchain: Degen Strats Part Three,” the lengthy governance post extensively details the methods and procedures in which Terra’s native token, LUNA, and TerraUSD (UST) USD 139 million could be implemented to “bring incredible cases. of UST usage to Ethereum DeFi “.

In the proposed strategy, which has garnered 3,500 visits and six responses from community members calling themselves Lunatics, Terra would deposit between 250,000 and 50 million dollars in UST in an attempt to boost the stability of each of the new associated projects. A community-led governance vote is expected to occur in the near future to determine confirmation.

DeFi liquidity provider and market maker Tokemak would receive $ 50 million in UST for up to six months, and loan and credit platform Rari Fuse would receive $ 20 million in UST over the same period. Performance aggregator Convex Finance would receive $ 18 million, while OlympusDAO would earn $ 1 million in UST bonds and $ 425,000 in LUNA incentives over three months.

The distribution of UST into a plethora of projects will help Terra accelerate quantitative ambitions such as its market capitalization within the stablecoin market. At the time of writing, Tether’s USDT is leading the way at approximately $ 78 billion, with Circle’s USDC in second place at $ 43 billion, followed by Binance’s BUSD at $ 14 billion, and finally UST, with a market capitalization of USD 10 billion.

In a recent tweet, Terra founder Do Kwon disclosed his ambitions to push the native UST network asset to the forefront of the stablecoin market, ahead of stalwart USD Coin, Tether and Binance USD (BUSD), among others.

The new Aave Arc service aims to improve institutional adoption in DeFi

Decentralized lending platform Aave (AAVE) announced the launch of its permissionless lending and liquidity group, Aave Arc, this week with the ambition to foster greater institutional engagement in fully regulated and compliant decentralized financial services.

Thirty organizations gained access to the service’s main whitelist, including digital asset custodian Fireblocks, along with Anubi Digital, Canvas Digital, SEBA Bank, GSR, and cryptocurrency performance aggregator Celsius.

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After successfully completing prerequisites such as the Know Your Customer and Anti-Money Laundering protocols, these companies will gain exclusive access to “safely participate in DeFi as liquidity providers and borrowers” in a market that has exploded. 10 times the total value locked in exactly 12 months: $ 30 billion to $ 300 billion.

Aave CEO and founder Stani Kulechov shared comments on the potential for expansion of the DeFi market with the implementation of this new service, stating:

“DeFi represents a powerful wave of financial innovation that includes transparency, liquidity, and programmability, and has been inaccessible to traditional financial institutions for far too long. The launch of Aave Arc allows these institutions to participate in DeFi in a compliant way for the first time. hour.”

WonderFi acquires Bitbuy parent company for $ 162 million

DeFi platform WonderFi Technologies agreed to buy First Ledger Corp, the parent company of Canada’s first regulated cryptocurrency exchange, Bitbuy this week for an impressive $ 162 million in an attempt to expand the presence of cryptocurrencies and DeFi across the country.

Backed by renowned billionaire investor Kevin O’Leary, WonderFi detailed its method of financing the acquisition by issuing 70 million new shares, paying $ 15.7 million in cash up front in addition to $ 23 million in deferred cash via a vendor return note that expires in 12 months. Along with this, the team stated that it would “retain substantially all current Bitbuy employees and enter into employment agreements with key members of the management team.”

Established in 2016, Bitbuy was licensed by the Ontario Securities Commission as a fully regulated cryptocurrency exchange in Canada after last November. The platform has more than 375,000 users who have transacted more than $ 3.4 billion. In May 2020, the Toronto-based exchange launched the world’s first 1: 1 Bitcoin deposit insurance scheme for its clients.

Commenting on the importance of licensed marketplaces within the digital asset ecosystem, WonderFi CEO Ben Samaroo stated:

“The integration of Bitbuy’s suite of products will accelerate and expand the reach and reach that WonderFi can bring to the market, and will drive long-term growth and value for the company.”

Token performance

Analytical data reveals that the total value of locked DeFi decreased slightly by 6.5% during the week to a figure of $ 131.8 billion, largely in line with the general market slowdown.

Data from Cointelegraph Markets Pro and TradingView reveals that DeFi’s top 100 tokens by market capitalization have been mostly bullish for the past seven days.

Secret (SCRT) took the lead this week with 26.6%. Chainlink (LINK) grew 24.2%, while Fantom (FTM) almost exactly replicated last week’s gains with a further 23.4% increase. Yearn.finance (YFI) and Dai, yes, the stablecoin, came in fourth and fifth this week at 8.2% and 0.03%, respectively.

Thanks for reading our roundup of this week’s most impactful DeFi developments. Join us again next Friday for more stories, ideas, and education in this dynamically moving space.