Terra has submitted a proposal to increase the use cases for the TerraUSD (UST) stablecoin. The project seeks to make the stablecoin available on different chains, including Ethereum, Polygon and Solana.
On Thursday, the platform published a blog post titled, “UST Goes Interchain: Degen Strats Part Three.” The post talks about how the platform will use $139 million worth of UST and LUNA for the initiative.
Terra’s ambitious proposal
Terra is currently the second-largest blockchain in total value locked (TVL). The LUNA token is currently among the top ten, with around $28.5 billion in market capitalisation.
The proposal notes that each deployment will involve a deposit of varying amounts of UST. The amounts will range between $250,000 and $50 million. This amount will improve the scalability of every new partner project.
The platform notes that the objective is to “bring awesome UST use-cases to Ethereum DeFi. The proposals are waiting to be passed through a vote by governance participants. The voting process will be conducted later. The proposal has a high chance of passing, given that governance participants on Terra have already started showing support.
Terra pushing for the growth of UST
The founder of Terra, Do Kwon, published a tweet on December 21 saying that his plan was for UST to be the dominant stablecoin in the crypto space. The recent proposal is aimed at increasing UST’s market cap. Currently, Tether is the largest stablecoin with a market cap of $78 billion. UST’s market cap stands at around $10.3 billion.
Tokemak, a DeFi liquidity provider and market maker, noted that Ethereum will receive a deposit of $50 million worth of UST for six months if this proposal passes. Rari Fuse, a permissionless lending and borrowing platform, would receive $20 million worth of UST in six months.
Convex Finance, a yield aggregator protocol on Ethereum, will receive $18 million in UST for six months. Additionally, LUNA tokens will also be issued as incentives to liquidity providers in pools on Convex Finance that use UST.
InvictusDAO, a fork of OlympusDAO running on Solana, has announced its collaboration with Terra. Commenting on this collaboration, the team at InvictusDAO noted, “holding UST helps solve structural treasury problems because we don’t want to increase our USDC and USDT holdings as it comes with centralised risk. UST helps grow the treasury and the amount of bonds we can sell.”
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