Is Terra Luna the next great altcoin?
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The highlight of this current bull run is the battle of layer-1 blockchains.
Or should I say Ethereum-killers?
Although the long list of candidates extends to NEO and EOS, there are currently four altcoins that are waging war on each other to be the next Ethereum.
I like to call them ‘The Big 4’ : Cardano, Polkadot, Solana and Terra Luna.
Among them, I think Terra Luna is destined to be the next great altcoin.
UST is Terra Luna’s decentralised stable coin. It is the world’s first decentralized stablecoin that is scalable, yield bearing and interchain.
Currently, the top stablecoins are Tether(USDT), USD Coin (USDC) and Binance USD (BUSD).
However, according to a meeting held by the U.S. Treasury Secretary Janet Yellen, the Treasury Department will let the U.S. Securities and Exchange Commission (SEC) take the lead in regulating centralized stablecoins i.e. USDT, USDC, BUSD and others.
This potential regulatory crackdown is bound to increase the demand for UST. To fulfill that increasing demand, more UST will need to be minted.
To mint UST, LUNA has to be burned, which will subsequently decrease the supply of LUNA.
Low supply and high demand is a good combination for an insane price pump.
TIP44 ‘Burn the community pool’
One of the main highlights of Columbus-5 upgrade was its Terra Improvement Proposal (TIP)- TIP 44.
TIP 44 initiated a community pool spend proposal to burn all remaining funds in the community pool. Following the initiation, 100% of the seigniorage was directed to the community pool, which will be burned gradually. For those who don’t know, seigniorage simply means the LUNA that is burned to mint its stablecoin UST.
As more tokens are burned, LUNA’s supply will drastically drop. This highly enhances LUNA’s tokenomics.
Inter-Blockchain Communication (IBC)
LUNA, a Cosmos-enabled blockchain, recently joined IBC. This means that LUNA can now interact with Cosmos, Polkadot and Solana.
This can ensure two things:
Mirror Protocol, launched on Terra Luna ecosystem, is the first synthetic assets protocol that bridges crypto with traditional markets by allowing users to mint tokens that mirror the market prices of stocks, futures, ETFs and other traditional financial assets. This allows cryptocurrency users to get exposure to the price action of traditional assets.
Minting such tokens requires depositing UST as collateral.
High demand for UST means – more LUNA gets burned- and we know what that means!
Anchor Protocol, launched on Terra Luna ecosystem, is considered to be the path to mass DeFi adoption. It uses diversified staking yields, money markets, ANC token incentives, and governance to compose a fully decentralized fixed-income instrument.
Anchor has greatly helped to increase the demand for UST- and we know what that means!
Orion.Money, launched on Terra Luna ecosystem, allows Terra Luna to evolve from a single-chain into a multi-chain that acts as a bridge between all blockchains and accepts multiple stablecoins like USDT and USDC.
It is responsible for driving wide-scale adoption for UST