Multi-sector blockchain protocol Terra (LUNA) has announced a proposal to deploy $139 million to five different DeFi projects across Ethereum, Solana, and Polygon to enhance UST’s use cases.
The proposal, however, needs to be accepted by the Terra community through a vote of governance participants that’s likely at a later date.
Terra as a Dominant Crypto Player
The details of how UST and LUNA worth $139 will be used on different DeFi platforms are contained in the document dubbed: UST Goes Interchain: Degen Strats Part Three.
As per the proposal, Terra has identified a few partner projects where it intends to deposit up to $50 million to support the stability of these protocols. Through this move, Terra said it wants to bring UST use cases to Ethereum DeFi.
These intentions align with Terra Founder Do Kwon’s previous comments where he noted that he wants to see UST as a dominant stable in the crypto space.
Currently, with $10.44 billion in market cap, TerraUSD (UST) is ranked 4th in the list of top stablecoins. Tether USDT ($78.44 billion), USD Coin USDC ($43.2 billion), Binance USD ($14.4 billion) are ahead of Terra USD.
Here is how Terra aims to utilize the $139 million.
Among the new DeFi projects where Terra is planning to deposit $139 in UST include Tokemak, a DeFi liquidity provider and market maker.
It intends to deploy $50 million in UST for a minimum of six months to support UST Pair Reactor. Apart from the regular TOKE rewards, the asset can be also be used by the Terra community to vote in the LUNA Token Reactor.
Rari Fuse (Ethereum)
The next project in terms of size of UST deployment is Rari Fuse, an unlicensed lending and borrowing platform, which will receive UST funds to the tune of $20 million for six months. UST intends to become the cheapest stable to borrow on Fuse.
Yield aggregator Convex Finance will receive $18 million in UST for six months. Terra will offer LUNA incentives to liquidity providers who use UST on different Convex pools.
OlympusDAO (Ethereum, Solana, Polygon)
The next project to see UST funding is Olympus, an OHM-based decentralized reserve currency protocol. The total proposed deployment of funds is $1.425 million in UST. OlympusDAO is already working with Terra, and it will release an encapsulated version of OHM, gOHM, on its blockchain.
A significant aspect of this partnership is the fact that Olympus will bring OlympusPro to Terra protocols. It also entails Terra community to partner with Olympus DAO.
A decentralized reserve currency on Solana network, Invictus is an Olympus fork but has emerged as a promising player in putting its treasury to work. Terra is planning to increase its footprints on Solana by creating IN/UST bonds with a contribution of $250,000. Frax Finance (FRAX) will provide $250,000 in Frax to match Terra’s contribution.