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UST Demand is on the rise: LUNA $2.7 billion worth of tokens were burned in December

27 Dec 2021 : 13:28
2 min read
  • 27 million LUNA tokens have been burned so far in December as demand for UST has skyrocketed
  • Currently, 102.71 million LUNA tokens have been burned since the Columbus 5 upgrade in late September
  • UST has become the first decentralized stablecoin to reach a market cap of $10 billion

Nearly $2.7 billion, or 27 million LUNA tokens, have been burned so far in December as demand for UST increases.

Demand for UST has skyrocketed this year

One of the most significant growth areas in cryptocurrencies this year is undoubtedly the stablecoin market UST, one of the stablecoins in the Terra ecosystem, has put up some impressive numbers in this area. According to Terra Analytics, nearly $2.7 billion or 27 million LUNA tokens have been burned so far in December as demand for UST has skyrocketed. The market cap of UST was around $200 million at the beginning of 2021. As of December 2021, the market cap is worth about $10 billion.

Currently, 102.71 million LUNA tokens have been burned since the Columbus 5 upgrade in late September. Aside from interoperability, the Columbus 5 upgrade introduced a new mechanism to keep stablecoins pegged to their fiat value: Each time UST is created, the corresponding amount of LUNA is burned. This led to a direct correlation between the two assets so that when demand for UST increases, so does the price of LUNA.

The largest decentralized stablecoin

Do Kwon, co-founder and CEO of Terraform Labs shared that UST has become the first decentralized stablecoin to reach a market cap of $10 billion. UST surpasses MakerDao’s DAI market cap of $9.3 billion by reaching this milestone. Both Huobi and Binance have also recently listed UST on their platforms, but the stablecoin still lags behind centralized competitors like USDT, USDC, and BUSD.

At press time, LUNA is trading at $96. But as demand for UST has grown exponentially, we have also seen the token’s price rise as they correlate. The price of Luna has risen 30% this week, and if demand for UST continues to rise, it will likely rise as well. As for the total locked value locked, the network recently surpassed the $21 billion mark.


About Author

Stan Colenbrander

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Stan is the head of news and podcast host at Cryptonary. He was formerly a member of the Cryptonary Pro community. In early 2021, he decided to drop out of journalism school at university to pursue journalism in real life and make an impact in the crypto space. . His areas of interest include the NFT industry, decentralised finance, and crypto start-ups.

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