Terra's UST Overtakes BUSD to Become Third Largest Stablecoin

Terra USD (UST), an algorithmic stablecoin on the Terra (LUNA) blockchain, has surpassed Binance USD (BUSD) to become the third largest stablecoin in the market.

UST is a USD-pegged stablecoin launched in September 2020. Its minting mechanism requires users to destroy reserve assets such as LUNA to mint an equivalent amount of UST.

According to Coingecko, UST’s total market capitalization has surged 15% over the past 30 days, to about $17.5 billion as of this writing. This figure currently makes UST the third-largest stablecoin, surpassing BUSD, which has a market cap of $17.46 billion as of this writing.

Currently, the asset is only behind industry giants Tether (USDT) ($82.8 billion market cap) and USD Coin (USDC) ($50 billion market cap), but at this stage, the gap is quite wide.

The data also shows that UST has been surging since mid-November, increasing its market capitalization by 525%.

UST Market Cap: Coingecko

Despite surpassing BUSD in market capitalization, UST trades far less than its direct competitor, with BUSD trading $2.26 billion in the last 24 hours compared to UST’s $437.9 million in 24 hours.

According to data from CoinGecko, the market capitalization of Terra’s stablecoin UST reached $17.5 billion on April 18, surpassing BUSD’s $17.4 billion and becoming the third largest stablecoin after USDT and USDC. But the trading volume of UST is very low, only one-fifth of BUSD.

— Wu Shuo Blockchain (@WuBlockchain) April 18, 2022

Terra has been grabbing headlines lately, in part due to the recent announcement by project co-founder Do Kwon that Terra will accumulate up to $10 billion worth of Bitcoin to back its UST reserves.

However, like the broader crypto market recently, the bullish news hasn’t pushed LUNA’s price higher. In the past 30 days, the LUNA price has fallen by 12.4% to $77.31 and is also down 34.4% from its all-time high of $119.18 set briefly on April 5.

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