Decentralized finance (DeFi) platform Terra (LUNA) has surpassed its rival blockchains to become the third-largest crypto by total value locked (TVL).
Crypto market intelligence firm Delphi Digital says that the Ethereum competitor has now overtaken Solana (SOL) and Avalanche (AVAX) in terms of TVL primarily due to value growth in Bonded Luna (bLuna), which is the token used by liquid staking protocol Lido as collateral to borrow stablecoin TerraUSD (UST) within the Anchor protocol.
“TVL on Terra network overtook Avalanche and Solana, making it [the] third-largest blockchain by TVL after Ethereum (ETH) and Binance Smart Chain (BSC).
It’s important to note that TVL numbers are highly reflective alongside native token prices as they are commonly used as collateral in DeFi and as base pairs for DEXes. In Terra’s case, DEX base pairs usually utilize Tether instead of LUNA, therefore this growth in TVL is primarily contributed by value growth in Lido bLuna.”
The TVL of a DeFi platform is the total value held within its smart contracts. It is calculated by multiplying the amount of funds locked into the network as collateral by the current price of the assets.
Delphi Digital points to how LUNA’s rise has helped Terra’s stablecoin UST increase its overall supply by 4 billion tokens due to a proposal to mint UST on the Terra network.
“The increase in UST Supply from under $3 billion to $7 billion across mid-November was due to this proposal to mint UST with LUNA in the community pool to grow the Terra ecosystem through UST usage.
UST did another ~$1 billion of growth in circulating supply after 19th November.”
LUNA is exchanging hands at $70.85 as of writing, an 46% increase from its 30-day low of $38.06.
Check Price Action
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Vectorpocket