On Jan. 6, Terra Research announced a proposal to extend the network’s stablecoin asset, terrausd (UST), to multiple different protocols on Polygon, Ethereum, and Solana. Terra’s governance blog post discusses how the proposal to leverage the $139 million UST could support “awe-inspiring use cases” in the world of decentralized finance (defi).
Terra Research proposes to expand Terrausd’s reach across 5 protocols
At the time of writing, Terra’s terrausd (UST) stablecoin is the fourth largest token pegged to the U.S. dollar among all existing stablecoins. It is also the largest decentralized algorithm USD pegged coin in circulation today, with a USD 10.4 million UST. In addition, the market value of stablecoins has increased by 21.4% in the past 30 days. Now, the team behind the Terra network hopes to increase the exposure of stablecoins to five different Defi protocols on the three chains.
The author of the proposal, Ezaan from Terra Research, explained how cross-chain UST liquidity has grown dramatically, arguing that adding more UST to a specific protocol would add a “great use case” to defi. The first UST collaborations mentioned are with the Olympus DAO on Ethereum, Solana and Polygon. Essentially, Ezaan wants to permanently enable UST bonds and $1 million in UST bonds at Olympus.
“Follow up the posts in the Agora thread, including when the UST bond will go live,” Ezaan said. “1 million bond transactions, UST in the Olympus DAO treasury updated every two weeks for two months, all three pairs of addresses exist and where you can join the farm.”
Partnership with Olympus DAO, Rari Fuse, Invictus DAO, Convex and Tokemak
Additionally, Ezaan mentioned working with Ethereum’s Rari Fuse, Solana’s Invictus DAO, Ethereum’s Convex Finance, and Ethereum’s Tokemak.
The five concepts proposed by Ezaan include:
- Olympus DAO: UST bond enabled, bond $1M UST, 425k UST to LUNA via Astroport in 3 months to get gOHM-UST rewards on Terra, Solana, Polygon
- Rari Fuse: 20m UST to seed fuse pool for 6 months to initiate UST lending
- Invictus DAO: Enable UST bond, bond USD 250,000 UST
- Convex: Swap $18M in UST to LUNA via Astroport over 6 months to increase Votium rewards
- Tokemak: $50M UST Deposited for 6 Months for Broad Liquidity and Farm TOKE
According to some comments on the Terra governance proposal, most community members like the idea. “Great idea. Let’s do it,” said one person. “Great to see ideas on how to expand UST to other L1s and how they have performed so far,” replied another Terra community member. “The proposal has seen no downsides so far and already lagging Frax in Convex, we should at least equal 100M or put more in Tokemak to balance the power.”
The proposal to expand UST comes after the stablecoin became a larger decentralized stablecoin than Makerdao’s DAI in terms of market valuation. And, three days before Ezaan proposed, Makerdao co-founder Rune Christensen, tweet Stablecoins UST and MIM are “solid Ponzi schemes” and end up with zero value.
What do you think of Terra’s proposal to extend UST to the other five protocols on Ethereum, Solana, and Polygon? Let us know what you think about this topic in the comments section below.
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