What is TerraUSD (UST)?

What is TerraUSD (UST)?

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TerraUSD (UST) is the predominant algorithmic and decentralized stablecoin launched on the Terra blockchain, and it is a scalable, yield-generating currency that is pegged to the value United States dollar.

The aim of TerraUSD is to offer increased value to the online community of Terra. In addition, TerraUSD is also aimed at providing an effective alternative for DeFi, which is infinitely scalable, especially when remembering the trilemma that other blockchains consistently struggle with, especially Ethereum, DAI, Bitcoin, and others.

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Thus, TerraUSD enables users to benefit from increased scalability, interest rate precision, and interchain use. TerraUSD has several advantages that distinguish it as a viable stablecoin contender.

UST's minting process satisfies the criteria of the DeFi protocols it employs without sacrificing scalability. Additionally, UST can be readily integrated into crypto wallets by simply adding TerraUSD as a payment mechanism.

Another area in which TerraUSD has shown its strength is in DApps. For instance, systems that mint fungible synthetic assets and monitor real-world asset values utilize UST as a baseline for pricing.

TerraUSD (UST) was launched in 2020 in a partnership between Terra and Bittrex Global. Since its inception, UST has become one of the most scalable stablecoins, and it is connected to Terra’s native cryptocurrency, LUNA, in addition to being a standalone crypto asset.

 

Component TerraUSD (UST)
Technologies Anchor Protocol, Dropship Bridge Protocol
Market Capitalization $10.1 Billion+
Open-Source Yes
Consensus Mechanism None
Smart Contracts Yes
Founders/Authors Do Kwon and Daniel Shin founded Terra Luna
Launch Date 2020
Circulating Supply of Coins 10,091,856,048 UST
Maximum Coin Supply None
Mining-based Coin? No
Is TerraUSD a Stablecoin? Yes
Does TerraUSD have a burn rate? Yes
Does TerraUSD have a Whitepaper? Yes, the white paper can be viewed here

 

Evolution and Development of TerraUSD

Terra, the firm behind TerraUSD, was founded in April 2019 by Do Kwon and Daniel Shin. They launched TerraUSD on Bittrex Global on September 12, 2020.

TerraUSD has been tremendously successful since its launch, outperforming rivals like Gemini's GUSD and Paxos' PAX, both of which are backed by fiat money kept in real financial institutions and subject to issuer administration.

Terra, the primary blockchain of TerraUSD, is the creation of Terraform Labs. The latter is a partner of the Terra Alliance, a group of sixteen e-commerce enterprises located across East Asia.

Despite its youth, it has achieved remarkable success in the sector. Experts anticipate that the UST will eventually overtake the category's leading stablecoin, MakerDAO's DAI.

 

What makes TerraUSD unique?

TerraUSD is unique because of its following native features:

Scalability Enhancement – TerraUSD is an algorithmic stablecoin that has the same value as newly produced stablecoins. To create one TerraUSD, one LUNA reserve asset must be burned.

TerraUSD's monetary policy, it turns out, scales virtually infinitely, enabling DeFi projects to attain their full potential.

Simple Exchange – The Terra ecosystem's stablecoins share 100% liquidity, which means that you may swap TerraUSD for TerraKRW (Terra's stablecoin tied to the Korean Won) with low costs.

Possibility of Passive Income – Additionally, users may earn passive income from TerraUSD by making use of the consistent interest rates offered by the Anchor protocol.

Anchor is a lending mechanism that guarantees investors a 20% return on their UST investments. Additional and consistent revenue is generated by awards at point-of-sale networks, which remain stable owing to commissions and inflation. This intricacy enables the formation of a reliable interest rate.

Interoperability – TerraUSD enables the connection of blockchain ecosystems using the Dropship bridge protocol.

Dropship combines TerraUSD with a variety of DeFi and DEX systems and, more crucially, facilitates the transfer of assets across chains. TerraUSD's value is determined by LUNA supply and demand.

As a result, a steady UST cost is ensured, as the Dropship protocol contributes to scalability.

 

What are the main uses for TerraUSD?

TerraUSD (UST) is a stablecoin designed to help users and the community. It is used in many services and goods. It is sometimes used with LUNA, and occasionally it is used alone.

Interchain utilization and great scalability of TerraUSD. Several DeFi methods may utilize the currency without sacrificing scalability owing to UST's unique minting methodology.

TerraUSD may be used as a payment option in e-wallets like Chai and MemePay. UST has thrilled Terra users in the field of yield or interest-bearing.

Anchor's interest or income on the Terra platform is based on UST block rewards from PoS networks. Dropship, a unique bridge technology, allows UST to effortlessly transfer across blockchains.

UST is also used in DApps. For example, the Mirror protocol utilizes UST as a basic asset to generate fungible “synthetic assets” that monitor real-life asset values in real-time.

 

What is the future potential for TerraUSD?

While stablecoins have shown to be a useful user onramp and fundamental for DApps, they are not widely available outside of Ethereum, preventing a thriving application ecosystem from growing.

TerraUSD will eventually be the first censorship-resistant money to provide a savings account via Anchor.

Terra's dev team has expressed optimism at advances in the DeFi space for their ecosystem's future.

It applauds Cosmos and Polkadot for integrating blockchains, Algorand and Avalanche for promoting scalability in the crypto ecosystem, and Solana for focusing on crypto exchange and asset listing.

Terra wants to work closely with these blockchains to improve the crypto sector.

 

Price analysis on TerraUSD

TerraUSD was initially launched in 2020, and its price analysis over the past year and recent months are as follows:

 

  2020 September October November December to date
UST Price High $1.0005 $1.005 $1.004 $1.009 $1.007
UST Price Low $0.85 $0.998 $1.0001 $1.0004 $1.00
Market Cap $181.48M $2.67B $2.79B $7.65B $10.1B

 

Where can you buy TerraUSD?

TerraUSD (UST) can be purchased from any of the following exchange trading platforms.

  1. Gate.io
  2. Huobi Global
  3. OKEx
  4. Binance
  5. Coinbase

 

1. Gate.io: Gate.io is a Bitcoin exchange platform that facilitates the trade of BTC, LTC, Ethereum, Qtum, and more blockchain-based crypto assets.

Within a few years of operation, the exchange acquired widespread appeal and is currently available in every country. However, the platform is not now active in China and has relocated to Virginia, USA, as its registered office.

Gate.io offers more than 800 leading cryptocurrencies in addition to more than 1,000 trading pairs. Additionally, Gate.io does not have a minimum investment amount when users register on the exchange.

 

PROS CONS
Gate.io offers a wide selection of digital assets that can be traded Unregulated
The platform is ideal for initial exchange offerings The exchange is not suited for complete beginner traders
There is a robust and innovative mobile application offered  
The exchange is renowned for its features  
There are several trading options including margin trading with 1:10 leverage  
There is 24/7 customer support available  

 

2. Huobi Global: Leon Li started Huobi, a Singapore-based cryptocurrency exchange, in 2013 in China. It was the biggest cryptocurrency exchange in China at the time of its creation. Huobi exchange is a subsidiary of the Huobi global company.

Since its inception, Huobi has grown despite market rallies to an enlarged volume, placing it as the fourth biggest cryptocurrency exchange globally.

 

PROS CONS
The platform is sophisticated yet user-friendly Fiat deposits and withdrawals are not supported
There is a wide range of tradable assets offered The account registration can be time-consuming
The platform offers leveraged and margin trading Strict withdrawal limits
There are stringent security protocols and measures implemented  
Multilingual support offered  
There is a comprehensive mobile app offered  

 

 

3. OKEx: OKEx is a renowned cryptocurrency exchange situated in Malta that enables customers to trade a wide range of crypto tokens in addition to several futures trading pairs. OKEx was created in 2017 and is headquartered in Malta and the Seychelles Republic.

 

PROS CONS
The exchange offers both spot and derivatives trading There are limitations on withdrawals
There is a massive selection of digital assets The platform does not accept United States clients
The exchange accepts fiat currency deposits  
Accepts PayPal deposits  
The mobile app is powerful and innovative  
There are no deposit fees charged  

 

4. Binance: Binance is a significant cryptocurrency trading company created in 2017 by Changpeng Zhao. Before he established Binance, Zhao worked for Bloomberg and the Tokyo Stock Exchange. After its inception, Binance quickly rose to prominence as the world's fastest high-frequency trading system.

Binance relocated from China to Malta immediately after its inception, followed by the establishment of Binance Jersey and Binance Uganda.

Binance, among other things, boasts one of the quickest order execution speeds and institutional-grade research reports.

 

PROS CONS
The exchange is known for its low transaction costs Limited deposit options
The native wallet is secure and has multi-currency options There is no fiat-to-crypto trading offered on the primary exchange
The dashboard caters for both beginner and professional users  
With higher trading volumes there are reduced trading costs  
There are two leveraged tokens offered  
There is a selection of educational resources offered  

 

5. Coinbase: Coinbase is the biggest cryptocurrency exchange established in the United States, dealing with around 100 cryptocurrencies. Coinbase's costs, on the other hand, could be perplexing and much higher than those of other rivals.

While Coinbase's security features are appealing, bitcoin has inherent dangers that investors should be aware of before risking their cash.

 

PROS CONS
The exchange offers close to 100 crypto assets The exchange is known for its high transaction costs
The minimum needed to start trading is extremely low  
Crypto assets are insured by the platform  

You can buy TerraUSD safely from these cryptocurrency platforms.

Does TerraUSD use coin burns?

Yes, Terra uses coin burns. Luna coins are being burned to enhance the supply of TerraUSD, Terra's stablecoin (CRYPTO: UST).

What is TerraUSD’s largest Competitor?

USDT is the largest competitor of TerraUSD.

Terra USD (UST) is an algorithmic stablecoin based on Terra Blockchain (USD). It is completely decentralized and indefinitely scalable, unlike its Ethereum rivals DAI and USDT (Tether), which lack user experience.

USDT was launched by Tether Limited, which claims to hold equal USD reserves as collateral. The corporation may issue as many USDT tokens as they like and determine the reserve information.

Terra USD is a stablecoin. To create a new UST Token, an identical quantity of LUNA, Terra's native currency, is burned, and this is how it achieves stability without collateral.

It just matches the USD price and is backed by fiat collateral, but there is no way to verify the reserves data. Terra blockchain can handle over a hundred transactions per second.

Because USDT is based on the Ethereum blockchain, transactions may take up to a few minutes to finalize. Transferring Terra USD (UST) costs just a few cents, compared to USDT and other payment gateways. USDT transfers are costly because of high GAS costs on Ethereum.

It employs Cosmos technology, which was developed to construct interoperable blockchain apps. UST is now accessible on Ethereum and Solana, with new blockchains to be added later. 

Tether's DeFi yield ranges from 2-20% APY depending on the platform. Compared to other stablecoin farms, Anchor Protocol offers a 20% APY on Terra USD.

What can TerraUSD smart contracts do?

Despite their incredible potential, smart contracts have been slow to catch on owing to currency price volatility. Because most consumers are used to valuing fixed rewards in insurance, credit, mortgage, and payroll, price volatility renders smart contracts useless.

So smart contracts may become the valuable infrastructure for mainstream enterprises. Terra will provide a reliable framework for constructing ten financial apps that utilize Terra as their base currency.

DApps on the Terra Platform will help build and strengthen the Terra family of currencies. This section discusses how the protocol's growth-driven fiscal policy subsidizes the more successful applications.

Is TerraUSD a Good Investment?

Yes, TerraUSD is a good investment.

Terraform Labs plans to leverage Terra's blockchain and associated cryptocurrencies, including one pegged to the Korean won, to create a digital financial system independent of large banks and fintech firms.

What is the supply and distribution of TerraUSD?

TerraUSD has a circulating supply of 10,091,856,048 UST, and there is no maximum amount. As users purchase UST, more coins are minted and put into circulation. As users sell UST, tokens are burnt, and it will subsequently reduce the circulating supply.

Is TerraUSD a viable Alternative Coin?

Yes, TerraUSD is a good alternative coin.

  • Traceability – All transactions are public on the ledger, but the identity of users is not known.
  • Hacking – There is no record of a blockchain hack.
  • Security – TerraUSD is extremely secure.
  • Transaction speed – Terra's blockchain can process hundreds of transactions per second.
  • Price Stability – TerraUSD's price is extremely stable because it is a stablecoin pegged to the United States dollar, with its value kept stable through algorithms.
  • Potential Investment – TerraUSD is a good hedge against inflation and volatility.
  • Popularity – TerraUSD is becoming increasingly popular, and it has recently overtaken DAI on the altcoin list.

What are the differences between TerraUSD And Bitcoin?

Bitcoin is the largest cryptocurrency in the crypto market in terms of its trading volume and market capitalization. Bitcoin is a medium of exchange as well as a great store of value. However, Bitcoin is known for its extreme volatility, which is something that UST can correct.

UST is a stablecoin that is pegged to the value of the United States dollar, giving investors a hedge against volatility and inflation while allowing them to grow their wealth long-term.

 

  Bitcoin TerraUSD
Price change 20/21 +400% 0.0%
Market Cap $800 Billion+ $10.1 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #1 – Original Crypto #21

 

What are the differences between TerraUSD and Ethereum?

Ethereum is the second-largest cryptocurrency in addition to being the largest alternative coin in the market. Ethereum is well-known as the most popular programmable blockchain for developers to create and launch DApps and smart contracts that have several real-world uses.

UST was developed and launched on the Terra blockchain, a programmable blockchain used for smart contracts, DApps, and stablecoins. UST is used as a hedge against volatility present in the crypto market.

 

  Ethereum TerraUSD
Price change 20/21 +880% 0.0%
Market Cap $460 Billion+ $10.1 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #2 #21

 

What are the differences between TerraUSD and USDC?

USD Coin (abbreviated USDC) is a stablecoin that is tied to the US dollar at a 1:1 ratio. Each unit of USDC that is currently in circulation is backed by $1 in reserve, which is stored in a combination of cash and short-term US Treasury bonds.

UST and USDC are both stablecoins backed by the USD, but USDC is more popular than UST, and it has a higher market capitalization.

 

  USDC TerraUSD
Price change 20/21 +0.11% 0.0%
Market Cap $42.2 Billion+ $10.1 Billion+
Past Hacks None None
Popularity High High
Altcoin Rank #7 #21

 

What are the differences between TerraUSD and Tether?

The differences between UST and USDT are as follows:

  • UST is completely decentralized, while Tether was created by Tether Limited, a centralized authority.
  • UST is stable because algorithms are used to peg its value to that of the United States dollar. To mint new UST, a proportional amount of LUNA is burnt, and vice versa.
  • Terra is much faster than Tether, with hundreds of transactions verified within seconds.
  • USDT transactions are more expensive than those on Terra.
  • The Terra blockchain is compatible with other blockchain applications because of Cosmos technology.

 

  Tether TerraUSD
Price change 20/21 +0.1% 0.0%
Market Cap $78.3 Billion+ $10.1 Billion+
Past Hacks 2017 – also closely linked with the hack on Bitstamp in 2015 None
Popularity Very High High
Altcoin Rank #4 #21

 

What are the differences between TerraUSD and NFTs?

Nonfungible tokens (NFTs) are digital assets that each have a unique value, with no two NFTs holding the same characteristics or value as another. TerraUSD, on the other hand, is fungible, which means that one UST has the same value and characteristics as another UST.

 

What are the differences between TerraUSD and DAI?

DAI is an ERC-20-based stablecoin that is issued by the Maker Protocol and MakerDAO. DAI's price is softly tied to the US dollar, and DAI is collateralized by a mixture of several other cryptocurrencies that are put into smart-contract vaults each time fresh DAI is produced.

UST is pegged to the United States using algorithms, and when UST is minted, LUNA tokens are burnt. When UST coins are sold, they are destroyed, and new LUNA tokens are minted.

 

  DAI TerraUSD
Price change 20/21 +0.4% 0.0%
Market Cap $9.25 Billion+ $10.1 Billion+
Past Hacks None None
Popularity High High
Altcoin Rank #23 #21

 

What are the differences between TerraUSD and Terra (LUNA)?

Terra is a blockchain-based protocol that employs fiat-pegged stablecoins to support global payment networks that are price stable. 

The difference between Terra and TerraUSD is that UST is a stablecoin that was launched on Terra's blockchain. In addition, UST and the native token of Terra, LUNA, are interconnected.

 

  Terra TerraUSD
Price change 20/21 +12,900% 0.0%
Market Cap $30.8B $10.1 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #9 #21

 

Does Terra coexist with Terra (LUNA)?

Yes, TerraUSD can coexist with Terra (LUNA).

LUNA is the Terra ecosystem's principal currency. The token gives participants of the Terra ecosystem exposure to governance.

This helps stabilize the ecosystem and constitutes the community pool for DApp development. The coin's value has soared since its creation.

The Terra ecosystem relies on LUNA for several functions, including the TerraUSD (UST) stablecoin.

The stability of TerraUSD is dependent on LUNA burning, and their ideals are intertwined. LUNA's price rises as UST supply rises. As soon as one UST reaches one dollar, users may sell it for the UST coin or dollars, and fresh UST coins enter the market to revalue it.

When UST goes below a dollar, it is sold for LUNA or dollars. As a result of this seigniorage, a certain quantity of LUNA is constantly burnt, making it scarcer increasing its value. The remainder goes into the communal pool.

 

What are the crypto wallets that can be used with TerraUSD?

A blockchain wallet is a digital wallet that enables users to securely store and manage Bitcoin, Ethereum, and other cryptocurrencies. A blockchain wallet enables cryptocurrency transfers and the conversion of those funds back to the user's native currency.

The following crypto wallets are the best option for TerraUSD:

  • imToken – imToken is a worldwide blockchain-based digital asset wallet that aims to deliver safe and reliable electronic investment management services to millions of customers in over 150 countries and regions.
  • MetaMask – MetaMask is a cryptocurrency wallet and an effective, innovative gateway to blockchain applications. MetaMask is both a browser extension and a mobile application that provides a key vault, secure login, token wallet, and token exchange.
  • Coinbase – The Coinbase Wallet app enables users to store their own currency and access the decentralized web via a DApp browser.
  • Trust Wallet – Trust Wallet is a cryptocurrency wallet. This online management application can handle digital currencies, keep track of market trends, and support a wide range of digital currencies.