The bulls are in control as Bitcoin and the crypto market break each all-time high, with Terra’s native cryptocurrency LUNA making the top 10 with a rally of 12.9% on the daily chart. Trading north of $ 40 at press time, this cryptocurrency has outperformed BTC and major altcoins in shorter periods of time.
LUNA on a rally in the daily chart. Source: LUNAUSDT trade view
However, LUNA could only run up its engines briefly and prepare for a new upswing. The Terra ecosystem has made important improvements to its ecosystem in the past few months.
Related reading | Why the Terra ecosystem postponed a major mainnet upgrade for late September
Hence, LUNA could have several optimistic reasons for continuing to outperform the market. As researcher Ryan Watkins recently stated, Terra is not ready to implement all 3 massive upgrades to its infrastructure.
The Colombus-5 and Wormhole V2 upgrades have gone live and the Inter-Blockchain Communication (IBC) protocol upgrade will be rolled out today, October 20th.
As NewsBTC reported in August, Columbus-5 was delayed to give every actor in the Terra ecosystem more time to prepare for the upgrade. Designed to introduce a deflationary mechanism for LUNA, this upgrade will increase Terra’s interoperable capabilities while creating more demand for the underlying asset.
In the meantime, the wormhole upgrade will act as a communication component between Terra, Ethereum, Solana, Binance Smart Chain and possibly more blockchains in the future.
Related reading | Why Terra (LUNA) will reward users with a new community bounty program
In addition, the upgrade introduced a user interface that eliminates friction between network value transfer capacity. Finally, the IBC protocol will enable Terra to benefit from the “unauthorized transfer of tokens across chains”. The team behind Wormhole celebrated the success:
Terra is known for its dynamic ecosystem, the # LUNAtic community and its decentralized stablecoin, $ UST. Terra has grown dramatically in the last few months and we are excited to unleash Terra innovations in the SOL, ETH and BSC communities!
LUNA Ready to take off? Bull market in the beginning
Historically, tokens with interoperable capacities have proven themselves well. The Binance Smart Chain Token BNB, built into its own burning mechanism, rose from a low of under $ 30 in 2020 to an all-time high of over $ 600 due to its CeDeFi utility.
Related reading | Can LUNA reach $ 170? This VC fund believes it has the basics
Terra has another secret weapon in its UST stablecoin. Speaking of recent developments, Watkins claimed that the Terra ecosystem created the potential for a new cross-chain trade boom. In September the researcher made the following prediction:
With Colombus-5 and Wormhole V2 going live in the coming weeks, UST growth is likely to accelerate, challenging DAI for the top spot among decentralized stablecoins.
As can be seen in the graphic below, Terra’s native UST has taken the decentralized stablecoin market by storm. Its dominance in this sector has skyrocketed since February 2021 and appears poised to continue the trend with an improved ecosystem.
Source: Ryan Watkins, Messari via Twitter
As Watkins pointed out, there are two main trends that will allow UST and Terra to grow: New capital is coming into the ecosystem due to the upgrades, UST is moving to new platforms.
Overall, these catalysts could all drive a ton of new demand for UST in the coming months, which was the fastest growing decentralized stablecoin as early as 2021. pic.twitter.com/LxcTF6LHKJ
– Ryan Watkins (@RyanWatkins_) September 15, 2021