Early March has seen Terra Network top £16.6 billion in total value locked (TVL), thanks to rising demand for DeFi services.
The total value locked (TVL) of Terra (LUNA) has defeated prominent smart contract-enabled blockchains such as Avalanche, Binance Smart Chain, Fantom, and Solana.
Terra Network kicked off the month of March with around £17.4 billion in TVL, according to data.
Opening the first day of February 2022 with a total value locked of £10.1 billion helped Terra win the competition from some of the most popular blockchains in the industry in March.
Terra has been playing its role in mainstreaming the adoption of digital assets since its inception in 2018, as DeFi becomes increasingly appealing to users. Terra’s ecosystem being home to over 73 projects as of March and its continued support to implement DeFi protocols explain why it went from a £1.89 million TVL in mid-November 2020 to £743 million at the end of Q1 of last year — a phenomenal growth in just four months.
Terra’s TVL had expanded by 248% by Q4 2021, reaching an all-time high of £2.59 billion in June.
Do Kwon, Terra’s co-founder, signaled in October that the protocol will eventually see around 160 new projects debut.
“Now that Columbus-5 is live, more than 60 projects are preparing to launch in the next six to eight weeks, and more than 100 have recently announced plans for the end of the year or early 2022,” he briefed about the platform’s prospects after the successful network upgrade.
Columbus-5 intended to improve Terra with a number of new and updated features, including a change to the functioning mechanics of Terra’s native LUNA token.
Apart from the improvements, Anchor (ANC), Astroport (ASTRO), Lido (LDO), Nexus Protocol (PSI), Spectrum Protocol (SPEC), and Stader have all contributed to Terra’s growth this year, with Stader having the largest one-month gain, an impressive 150% increase in TVL.
Nexus Protocol’s TVL climbed by more than 90% in March, while Lido Protocol surpassed Aave by more than 130%, and Anchor swelled by more than 57%.
The introduction of TerraUSD (UST), with the backing of £0.76 billion Bitcoin reserve, was the most interesting project that drove Terra’s TVL to £16.6 billion.
In contrast to other stablecoins backed by the US dollar (USD), UST is pegged to the value of USD through a minting and burning mechanism for LUNA, Terra’s native token. If the stablecoin falls below £0.76 per coin, UST can be exchanged for LUNA, which can subsequently be minted and sold for £0.76 USD, allowing investors to profit from arbitrage. As the demand for UST grows, LUNA tokens will continue to burn, making it a deflationary tool with an upward price trend.
According to Do Kwon, there are at least 87 more projects expected to start by the end of 2022.
With the upcoming launches, it’s plausible to expect Terra’s TVL to continue to rise to new all-time highs well into 2022.