TerraUSD (UST) adoption backs LUNA’s ascension to a new all-time high

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Stablecoins are an integral part of the centralized crypto sector and the decentralized financial (DeFi) ecosystems that have emerged in recent years because they provide the liquidity needed for traders to easily trade in different assets. They also serve as a shelter against strong downturn swings as the 25% correction seen on December 3rd.

One project with a stablecoin component that has seen its price rise to new all-time highs despite the wider market pullback is Terra (LUNA), a multi-sector blockchain protocol designed to build a global payment system using a fiat-linked establishment called TerraUSD (UST ).

Data from Cointelegraph Markets Pro and TradingView shows that since the $ 37.86 drop on November 26, LUNA’s price has risen 106% to a new all-time high of $ 78.43 on December 5, as its 24-hour trading volume has grown to a record high of $ 5.66 billion.

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MOON / USDT 4-hour chart. Source: TradingView

Three reasons for the break in LUNA price include UST’s growing supply, a series of new cross-chain integrations for the Terra ecosystem, and a growing total value locked (TVL) on the Terra network.

UST supply hits new all-time high

One of the main drivers behind the strength seen in LUNA was the rapid growth of UST’s circulating supply, which is now the largest algorithm-supporting stable in the market and the fourth ranked stablecoin with a market limit of $ 8.222 billion.

Crypto bidders in favor of decentralized stability options have accepted the use of UST compared to its more centralized equivalents USD Coin (USDC), Tether (USDT) and Binance USD (BUSD).

As UST’s popularity grows, many in the field have begun to call it “The DeFi Dollar” because it embodies the ethos of decentralization and is slowly spreading across the multi-chain DeFi landscape.

Cross-chain integrations

LUNA is also available across a number of cross-chain bridges, making it easier for LUNA owners to invest in DeFi ecosystems on Ethereum (ETH), Solana (SOL), Fantom (FTM) and Polygon (MATIC).

Related: Decentralized exchange-aggregator trading volumes are rising to new highs

Total value locked on Terra reaches an all-time high

Growing use of LUNA and UST pushed the total value locked on the Terra blockchain to a new all-time high of $ 14.36 billion on December 5 and LUNA price hit a record on the same day.

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Total value locked on the Terra network. Source: Defi Llama

TVL’s rapid growth has resulted in Terra becoming the third-ranked blockchain network according to TVL after surpassing Solana, which has $ 12.08 billion in value locked into its protocol, while the top-ranked Ethereum network boasts a $ 500 TVL. 164.72 billion and the Binance Smart Chain has $ 22.4 billion in value locked into its blockchain.

VORTECS * data from Cointelegraph Markets Pro began detecting a bullish outlook for LUNA on November 24, ahead of the recent price rise.

The VORTECS * Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements, and Twitter performance.

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VORTECS * Score (green) against CHZ price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS ™ Score for LUNA started to rise on November 24th and reached a maximum of 85 around the same time as the price started to increase 106% over the next eleven days.

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