Ethereum’s Rival Terra Hits New ATH And Enters Top 10 Coins List

Ethereum’s rival Terra has just reached a new all-time high as it entered the top 10 coins list, thanks to its weekly 58% surge. Let’s find out more in today’s altcoin news and analysis.

LUNA is the native cryptocurrency of the Cosmos-based Terra network which is considered to be Ethereum’s rival as well, alongside Solana. LUNA managed to hit an all-time high today with a price of $69.56 and now the price jump puts the crypto on the list of a crypto market top ten biggest by market cap after flipping DOGE to take the 10th spot. LUNA dipped slightly yesterday as it hit a new high earlier today and it is now trading for $68 but It is still around by 7% for the day.

Terra is a blockchain built using the cosmos software development kit and it is used mostly to create algorithmic stablecoins pegged to different fiat currencies like the Euro or the dollar. LUNA is the project’s native cryptocurrency which is used to mint these stablecoins and to pay for network fees and to participate in the governance or voting on the network.

Right now, Terra is the fifth biggest layer-1 smart contract blockchain behind Cardano, Solana, Ethereum, and Polkadot. The current price surge for LUNA came amid a wave of new developments in the Terra ecosystem and the most notable development was the protocol’s Columbus-5 upgrade that launched at the end of November and activated a burn mechanism that removes Luna from circulation thus making the asset more scarce. Whenever Terra’s dollar-pegged stablecoin started to trade above its $1 peg, the protocol launched arbitragers to mint more UST by burning a chunk of the LUNA coins. By increasing the supply of UST, the price would drop and whenever the opposite thing happened, a portion of UST will be burned to mint more LUNA which essentially maintains stability.

A portion of LUNA and UST will be burned before the upgrade so the other portion was transferred to a community pool. Now with Columbus-5, the coins in the community pool are burned and they create so much more of a dramatic deflationary environment. Alongside the upgrade, the demand for UST soared and since it is the only way to mint more UST is by burning LUNA, the native coin continued to hit a new high after its all-time high. In terms of market cap, UST is now the fifth-biggest stablecoin on the market with $7.8 billion so when Columbus was activated, the figure was set at $2.6 billion.

Just for context, the two biggest stablecoins USDT and USDC have market caps of $74.9 billion and $39 billion respectively. Finally, Terra users are waiting for the launch of Astroport and Mars protocol too.