The LUNA network’s decentralized stablecoin has surpassed a market worth of $10 billion, making it the first decentralized stable currency to do so. Over the last month, Terra (LUNA) has been one of the largest gainers in the crypto market, and the entire ecosystem now appears to be expanding in lockstep.
Despite approaching regulatory uncertainties, the stablecoin sector is rapidly growing. While centralized stablecoins like USDT and USDC have dominated the crypto market for nearly a decade, it appears that the growing controversy surrounding their issuance has allowed decentralized stablecoins to thrive.
Until a few years ago, Tether’s USDT held a clear majority of the market with well over 95% market share. In 2021, however, Circle’s USDC made up a lot of ground and now accounts for at least half of USDT’s market worth.
Governments joined in to control the sector in 2021, which was all about mainstream crypto acceptance. While the US and a number of other European central banks have expressed concern about uncapped stablecoin issuance. Also, decentralized stablecoins may become a popular option in the future.
Aslo, UST’s meteoric rise to a market capitalization one-fourth that of USDC is a shining illustration. Of course, of how decentralized stablecoins may shape the future.
“A decentralized stablecoin works by backing the invested dollar or currency of preference with”
“cryptocurrency that is worth more than that dollar. This comes with a certain risk due to the fact that”
” the underlying crypto asset is volatile, DAI is an example of this considering it uses collateralized debt denominated in Ethereum.”
Terra’s recent success also contributed to the rise of UST; as the network and trade activity rose, so did the use of the decentralized stablecoin UST.
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