The decentralized stablecoin issuer Terra issued an ambitious proposal to expand the interchain rollout of its stablecoin TerraUSD (UST) through five projects on Ethereum, Polygon, and Solana.
Terra Research Thursday’s post “UST Goes Interchain: Degen Strats Part Three” provides details on how UST’s $ 139 million and Terra’s native stablecoin LUNA would be used., and on which platforms if the proposal is approved.
Terra is a blockchain that supplies algorithmic stablecoins, and LUNA has a market capitalization of USD 28.5 billion.
In each proposed deployment, Terra would deposit UST in varying amounts, from USD 250,000 to USD 50 million, to drive the stability of each of the new associated projects.. The main goal is “to bring impressive UST use cases to Ethereum DeFi.” A vote will be held later for government participants to approve the proposal.
Terra founder Do Kwon made it clear in a Dec. 21 tweet that wishes UST to be the dominant stablecoin in the cryptocurrency market. The distribution is intended to help Terra accelerate its efforts to increase its market capitalization. Currently, only Binance USD (BUSD) ($ 14 billion), USD Coin (USDC) ($ 43 billion) and Tether (USDT) (($ 78 billion) stablecoins have a market capitalization greater than UST ($ 10.3 billion). ).
Decentralized Finance Liquidity Provider (DeFi) and Market Maker Tokemak on Ethereum would receive a $ 50 million deposit in UST for at least six months if the proposal is approved.
The Rari Fuse lending and borrowing platform would receive USD 20 million in UST over six months. The funds would be deposited in three pools in Fuse to help UST become the “cheapest stable to borrow from” in Fuse.
The yield aggregator Convex Finance on Ethereum would receive $ 18 million over six months. Terra would inject greater incentives from LUNA to liquidity providers in various pools on the platform that use UST. Convex is one of DeFi’s largest return aggregators, with a market capitalization of $ 1.9 billion.
The OlympusDAO decentralized reserve currency (OHM) protocol is already associated with Terra and will launch gOHM, a wrapped version of OHM, on Terra. Olympus’ proposal includes a USD 1,425 million commitment to its USD 694 million treasury through USD 1 million in UST bonds that will remain in the treasury “forever” and USD 425,000 in LUNA incentives for three months.
“Bond $ 1m UST with Olympus and 3,3 the OHM forever”
– OlympusDAO (@OlympusDAO) January 6, 2022
“The $ 1 million UST bonds with Olympus and 3.3 OHM will be forever.”
InvictusDAO is a fork of OlympusDAO on the Solana network. Terra would increase its expansion in Solana by contributing USD 250,000 in UST to create IN / UST bonds. Frax Finance to Match 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 the project’s top holdings in its $ 71 million treasury. The InvictusDAO team seemed optimistic about the partnership with Terra, saying at the AMA:
“Holding a UST holding helps to solve the structural problems of treasury because we do not want to increase our holdings of USDC and USDT, since it carries a centralized risk. UST helps increase the treasury and the amount of bonds we can sell. “
A representative for 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 quality cross-chain stablecoins will benefit the ecosystem immensely.”
At the time of writing this article, the proposal seemed to have strong support from the governance participants in Terra.