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We released TerraUSD (UST) with Bittrex Global a few weeks ago and have plans to interchain it to all major blockchains, beginning with Ethereum and Solana. Despite the fact that there are already a large number of USD stablecoins, the recent surge in demand on DeFi showed that none of them is sufficiently scalable to support the growth of blockchain ecosystems.
The first scalable, yield-bearing, and interchain decentralised stablecoin is TerraUSD. We are eager to introduce TerraUSD to numerous ecosystems and applications and assist DeFi in scaling.
When the desire for stability exceeds the demand for asset leveraging on Ethereum, a problem results. Recently, the use of Dai in numerous DeFi protocols has resulted in a sharp increase in demand for Dai (unmatched by demand for leverage), creating absurd situations where Dai trades at a significant premium to the Dollar, forcing the Maker Foundation to take drastic measures to try to restore the peg:
While TerraUSD is still in its infancy, TerraKRW, a stablecoin pegged to the Korean Won, has been rapidly growing and gaining adoption in Korea. TerraMNT, a stablecoin pegged to the MNT, is currently the most widely used stablecoin. Due to shorter settlement times and reduced transaction costs made possible by avoiding settlement networks (-40–50%), TerraKRW-powered payment solutions are growing into e-commerce checkouts in Asia (Asia avg. 7 days vs 6 seconds for Terra).
With more than 2M active users and 1.2B in yearly transaction volume after less than 16 months of operation, Chai is the fastest-growing e-wallet in Korea. It is deeply integrated with the biggest Korean online retailers, and it will expand offline in 2020 thanks to interfaces with the Chai top-up debit card and physical shopping (e.g. CU, largest convenience store chain).
1.5% of web users in Mongolia use MemePay, an e-wallet, at F&B and retail establishments in Ulan Batuur. (https://www.coindesk.com/stablecoin-startup-terra-expands-to-mongolia-with-taxi-payment-service)
Terra presently has the third-highest number of transactions of any blockchain (after Bitcoin and Ethereum) and is earning 16M USD in fees annually as a result of its explosive growth in the payments industry.
All Terra stablecoins share liquidity; TerraUSD and TerraKRW can be exchanged on-chain with very low foreign exchange costs. To deliver DeFi to millions of consumers, TerraUSD will build on KRT’s track record and liquidity.
We revealed last month that Anchor, a savings system delivering stable income on Terra stablecoins, would soon be launched.
Users have been able to earn stablecoin returns thanks to loan markets on USDC and Dai, but rates have been extremely unstable because they are driven by the cyclical speculation of underlying tokens. When there is a large demand for ETH loans, interest rates rise, and when there is a low demand, interest rates fall.
The majority of PoS chains have consistent block rewards due to transaction fees and inflation, which results in a much more dependable APR. Anchor yield is fueled by block rewards from the whole universe of PoS chains. Most significantly, Anchor yield is unrelated to market mood (not influenced by leverage) and will act as a vital check on the maniacal speculation in the rest of the DeFi market.
As soon as TerraUSD launches through Anchor, it will be the first censorship-resistant currency to provide a savings experience that is comparable to a conventional savings account.
While stablecoins have proven themselves to be a valuable user onramp and primitive for decentralized applications, very few chains outside of Ethereum have ready availability of stablecoins, limiting a vibrant application ecosystem from forming on these chains.
In a few weeks, we will introduce Dropship, a brand-new bridge protocol that will enable the transfer of Terra stablecoins from the Terra mainnet to other blockchains.
In order to incorporate TerraUSD into well-known DeFi apps and DEXes, Dropship will first transfer TerraUSD to Ethereum and Solana.
At Terra, we want to link and support a lot of blockchains. As ardent proponents of a decentralised future, we are confident that layer 1 will also be decentralised. There will be a wide variety of blockchains that enable developers in many locations to create applications for various use cases. We are enthusiastic about Cosmos and Polkadot because they have the potential to be routers that link various blockchains together; we think Solana has a great deal of potential to become the NASDAQ for cryptocurrencies; and we look forward to Algorand and Avalanche because they will push the limits of computing through rigorous and intentional research to aid in the scaling of blockchains. By providing our stablecoins as the foundation for each of these blockchains, Terra hopes to contribute to the effort to ensure their success.