Bulls are in control as Bitcoin and the crypto market set new all-time highs; Terra’s native cryptocurrency LUNA enters the top 10 with a 12.9 percent gain on the daily chart. At press time, this cryptocurrency was trading above $40 and had outperformed BTC and major altcoins in lower timeframes.
LUNA, on the other hand, could be revving up its engines and preparing for a new leg-up in the near future. In recent months, the Terra ecosystem has made significant improvements to its ecosystem.
As a result, LUNA may have multiple bullish reasons to continue outperforming the market. Terra is nearing completion of all three massive infrastructure upgrades, according to researcher Ryan Watkins.
The Colombus-5 and Wormhole V2 protocol upgrades are now live, and the Inter-Blockchain Communication (IBC) protocol upgrade is scheduled to begin today, October 20th.
Columbus-5 was postponed in August, giving every actor in the Terra ecosystem more time to prepare for the upgrade. This upgrade, which is intended to introduce a deflationary mechanism for LUNA, will improve Terra’s interoperability while increasing demand for its underlying asset.
Meanwhile, the Wormhole upgrade will serve as a communication link between Terra, Ethereum, Solana, Binance Smart Chain, and possibly more blockchains in the future.
Furthermore, the upgrade added a user interface that will reduce friction between network value transfer capacity. Finally, Terra will be able to benefit from “permissionless trans of tokens across chains” thanks to the IBC protocol. Wormhole’s team congratulated themselves on their accomplishment:
Terra is well-known for its thriving ecosystem, #LUNAtic community, and $UST, its decentralized stablecoin. Terra has expanded rapidly in recent months, and we are excited to bring Terra innovation to the SOL, ETH, and BSC communities!
Is LUNA Prepared to Take Off? Early Stages of a Bull Market
Tokens with interoperable capabilities have historically performed well. Binance Smart Chain token BNB, which is integrated with its own burn mechanism, rose from a low of less than $30 in 2020 to an all-time high of more than $600 on the strength of its CeDeFi utility.
Terra has another hidden weapon in the form of its stablecoin UST. In light of recent developments, Watkins asserted that the Terra ecosystem has created the potential for a new cross-chain trade boom. The researcher made the following prediction in September:
With the launch of Colombus-5 and Wormhole V2 in the coming weeks, UST growth is expected to accelerate, positioning it to challenge DAI for the top spot among decentralized stablecoins.
Terra’s native UST has taken the decentralized stablecoin market by storm, as shown in the chart below. Its dominance in this sector has skyrocketed since February 2021, and it appears poised to continue the trend with an upgraded ecosystem.
According to Watkins, there are two major trends that will allow UST and Terra to grow: new capital entering the ecosystem as a result of the upgrades, and UST moving onto new platforms.
In totality these catalysts could all drive a ton of new demand for UST in the coming months, which has already been the fastest growing decentralized stablecoin in 2021. pic.twitter.com/LxcTF6LHKJ
— Ryan Watkins (@RyanWatkins_) September 15, 2021