While Bitcoin and Ethereum prices are still not moving, Terra is taking off – a new partnership could be responsible.
The blockchain project Terra deals with the construction of infrastructure for stablecoins – TerraKRW (KRT), TerraUSD (UST), TerraMNT (MNT) and TerraSDR (SDT) are represented. LUNA is the native token of the Terra ecosystem. It is used to ensure the price stability of the various stablecoins and is therefore essential for Terra.
LUNA also has a governance function. LUNA owners have a right of co-determination, which entitles them to make suggestions for changes to the protocol.
Within the past month, LUNA was one of the top performers in the crypto space.
LUNA is up over 27 percent on a monthly basis and is trading at $ 7.18 as of press time – but what factors could be responsible for the surprise increase?
Mass adaptation: Terra and Harmony cooperate
Probably the most important factor that is currently giving LUNA bullish momentum is likely to be a recent one announced Be a partnership with Harmony (ONE). Harmony is an open source digital asset platform that aims to connect blockchains together. Together, Terra and Harmony want to advance the adaptation of stablecoins in decentralized finance (DeFi).
For this purpose, the stablecoins from Terra are to be comprehensively integrated into the Harmony ecosystem. If this succeeds, all Harmony users can trade Terra’s stablecoins across blockchain after the integration. First of all, you want the blockchain from Terra, Harmony, Ethereum, Binance and Cosmos support.
This in turn could lead to UST becoming one of the first stablecoins that can be transferred across multiple blockchain networks.
It is therefore likely that many investors are currently betting that the adaptation of terra stablecoins will increase massively in the near future as a result of this cooperation.
Terraform Labs makes 70 million UST easy
Another factor that has given Terra a boost in the past few days comes from Terraform Labs. The company behind the stablecoin project made 50 million SDT worth over 70 million US dollars for the project.
You want to use the money to finance two important things. On the one hand, the strategically important partner Anchor Protocol is to be supported in the development of Anchor V2. On the other hand, it should guarantee that the UST staking rate that Terra offers on Anchor, remains at 20 percent.
In doing so, Terraform Labs wants to prevent investors from migrating from Anchor and elsewhere due to falling UST yields.