Prominent Investors Speculate Why UST Surpassed Synthethix USD

Some prominent investors speculate why Terra’s UST surpassed synthetix’s USD despite UST challenging the hegemony of DAI as we are reading more in today’s crypto latest news.

The market cap of Terra’s algorithmic stablecoin which follows the value of the US dollar topped $8.5 billion with investors speculating what is boosting the adoption and how did UST manage to leave the competition so far behind. While fueling the market, the decentralized stablecoin sector is rapidly expanding. By leveraging unparalleled usage, this breed of crypto surfaced as a vital part of the ecosystem as some prominent investors speculate.

Osmosis is the third largest exchange (both CEX and DEX) for $UST by volume.

The 🌊 is just beginning… https://t.co/7z9JJCEYvf

— Osmosis (@osmosiszone) December 8, 2021

The surging adoption of UST spurred the debate on Twitter as Kyle Samani is the co-founder of MultiCoin Capital asked his followers for an opinion on what sets Terra’s decentralized stablecoin apart from synthetix’s stablecoin sUSDT in particular. Terra’s native stablecoin uses Luna as a reserve asset and each time someone mints UST, the dollar equivalent of LUNA gets burned. LUNA as a native token increased to the top 10 of cryptos as it rallied by more than 8% during the past week despite the market drowning in the red. The UST market cap increased 10.5% at the same time and grew 197% during the past month according to the data from coinmarketcap.

While the burning mechanism is connecting the two cryptocurrencies in a scalable monetary policy, UST is leveraging yield-bearing capabilities. Rayn Watkins argued:

“However, what UST has in its favor that other decentralized stablecoins do not have is that its not playing DAI on its home turf.”

According to Messari, rather than trying to challenge DAI on Ethereum, UST is trying to build its own ecosystem on terra and expand multi chains. This was the plan so far that Do Kwon executed without issues. Kwon said that the protocol’s native stablecoin could reach the $10 billion market cap by the end of the year and following the cardinal COl-upgrade, the blockchain development aimed to maximize the cross-chain interoperability as well as to attract other projects with the goal to boost UST usage and adoption.

What’s your best theory on why sUSD didn’t take off, where UST did?

— ksam.sol (@KyleSamani) December 8, 2021

The SNX governance token of Synthethix, is an ERC-20 token whose staking enables issuing synthetic assets on the Ethereum chain by using the Minter dapp and saw its price of the token increase 109% during the past year after recording a 19% drop in value.