An overview of Terra’s ecological development around UST’s top-level design ideas

As a stable currency protocol algorithm based on the start of 2018, Terra Protocol is committed to providing a set of price stability and is widely used stable currency system, the entire three years, Terra Eco and indeed around the “price stability” and “widely used” two The core goals are working hard.

Especially since the beginning of this year, with the continuous development of stable currency UST on the chain (the development of Mirror Finance, Anchor Protocol, and the expansion of blockchain networks such as Solana and Harmony) and off-chain (Amazon gift card, payment integration) strategic locations , Coupled with the “Columbus-5 Upgrade” clarified that the launch in September and the expected multi-chain assets brought by the Wormhole cross-chain bridge, the Terra ecology has received widespread market attention recently.

Just in the past, July 7, 2021, Terra announced the launch of a USD 150 million ecological fund , which will be used to sponsor projects built on the Terra ecology, thereby promoting Terra into the next stage of development and enhancing its ecological projects. Accessibility for mainstream adoption.

“One core, three hands, N ecological agreements”

Terra ecology can be summed up in one sentence as “one core, three hands, N ecological protocols”.

“One core” is the stable coin UST (the other two stable coins on Terra are the SDT of the World Monetary Fund’s Special Drawing Rights SDR and the stable coin KRT linked to the Korean won. The linking idea is exactly the same as UST) , The current total market value has reached 2.44 billion US dollars (as of September 7 data) , second only to USDT, USDC, BUSD, DAI .

The design ideas of the entire Terra ecology are all around how to expand the use scenarios and payment requirements of the stable currency UST, and the operation of UST adopts a dual-token design :

  • Luna: token for governance, pledge and verification;
  • UST: a stable currency pegged to the native U.S. dollar;

The simple understanding is that every time an UST is minted, it must burn a dollar worth of LUNA , and LUNA helps maintain the peg of UST to the US dollar through the arbitrage mechanism:

Whenever the UST transaction is higher than the peg, the user can send LUNA worth 1 USD to the system and receive 1 UST. Conversely, when the UST transaction is lower than the peg, the user can send 1 USD UST to the system to obtain 1 USD LUNA. In both cases, users are incentivized to arbitrage, which helps maintain the peg of UST to the U.S. dollar.

An overview of Terra's ecological development around UST's top-level design ideas

The “three graspers” are Mirror Finance and Anchor Protocol, two official Terra official (funded and launched by Terraform Labs) on-chain ecological fist products, and Chia , a payment application that supports actual payment scenarios under the chain.

Among them, the payment program Chai has undergone more than two years of development test in the offline payment scenario in South Korea, and the growth is stable in terms of data; and the synthetic asset agreement Mirror Finance has become the industry’s largest synthetic US stock trading platform; Anchor Protocol is a fixed interest rate agreement in After the introduction of b ETH in August , the lock-up ecology and volume also ushered in significant growth.

In general, the two major products of Mirror Finance and Anchor Protocol currently play a central role in the ecosystem on the Terra chain. Together with the coverage of Chai’s off-chain payment scenarios, they have captured the majority of people’s desires from the three aspects of payment, investment, and savings. Novice users who try to get in touch with the world of encryption.

“N eco sub-agreement” is the current line up (to be) a number of ecological projects around the UST Terra launched, such as Prism, Nebula, Alice, etc. (according to incomplete statistics enough to have more than 60 of More) .

The world line of these ecological protocols will eventually be consolidated into the use scenarios and consumption needs of the stable currency UST through the combined revenue collaboration with Mirror Finance and Anchor Protocol.

Terra ecological overview

Looking closely at Terra’s ecological layout, it first uses the payment application Chai to allow UST to be used for payment and consumption in the real world off-chain, quickly narrowing the distance between the encrypted world and the traditional world, and also constructing real-world payment requirements for UST The primary use case of the. This makes UST not only a stable currency in the crypto world, but also a real payment method that can be used.

At the same time, the traditional financial assets are synthesized on the chain through Mirror, and the investment usage scenario on the chain is built for UST, and then the Anchor is used to earn 20% of the stable currency income to build the savings usage scenario on the chain. So far, UST The basic demand pattern of China has been determined.

A number of subsequent ecological projects are mostly developed around this, to further strengthen the scene demand of UST from the three channels of payment, investment, and savings, and realize the holy grail of “price stability” and “widespread adoption” of stablecoins.

Three important hands

Chai mobile payment application (

The payment application Chai was launched in June 2019 and is Terra’s first ecological project. As a fiat currency payment gateway under the supervision of the Korean government, it can connect to about 15 large banks and is committed to becoming the preferred payment application for Korean merchants.

And its main settlement unit is also based on Terra’s Korean won stable currency KRW. According to Chaiscan data, as of August 28 , Chai’s recent daily active users were approximately 59,000 , with an average daily transaction of more than 100,000 and daily consumption of 2.084 billion KRW (1.8 million US dollars) .

For users , consumers who use the Chai app or Chai debit card to make purchases at partner merchants can get discounts or points rebates;

For merchants , Chai’s handling fee rate is around 0.5%, which is much lower than the 2-3% transaction fee charged by other credit institutions in Korea;

An overview of Terra's ecological development around UST's top-level design ideas

In addition to Chai, other payment applications in Terra Eco include MemePay (Mongolia), etc., which are built around actual offline merchant consumption scenarios.

So unlike Mirror Finance and Anchor Protocol’s Terra ecological “gemini” status, Chai alone supports the main payment scenario needs of UST under the chain, and it is also one of the few to bring cryptocurrency Blockchain application used as payment in the real world.

Mirror Protocol Synthetic Assets Protocol (

Thanks to the low gas cost and high scalability typical of the competitive public chain of Terra, Mirror Finance currently covers U.S. stocks (Alibaba, Tesla, Robinhood, etc.) , encrypted assets (BTC, ET H) and many other types of synthetic assets, and In the field of synthetic U.S. stock trading, it has already taken the lead in the industry.

The casting process of Mirror Protocol is similar to Synthetix, both of which are over-collateralized. The difference is that Mirror uses stable currency UST or mAsset (synthetic assets on Mirror) to over-collateralize to mint synthetic asset tokens.

The minimum mortgage ratio of UST is 150% , and the minimum mortgage ratio of mAsset is 200%. The U.S. stock synthetic asset tokens pledged and minted are also on-chain and can be traded on Uniswap and Terraswap.

In short, any investment demand based on synthetic assets such as US stocks in Mirror will eventually be transmitted back to UST, providing value for Luna and UST.

And “Data Doesn’t Lie: Why has Synthetix performed so sluggish recently?” 》( The article also compares and analyzes in detail the lock-up volume, transaction amount, fee income, and lock-up of Mirror Finance and Synthetix, an established synthetic asset based on Ethereum. The respective performance of key agreement indicators such as volume and number of users, especially in synthetic U.S. stocks, Mirror Finance has become the largest synthetic U.S. stock trading platform in the blockchain world.

Especially after the launch of Mirror V2 on June 25th, there are three key new features:

  • New collateral LUNA, MIR, ANC, aUST;
  • Short incentives (generating sLP) ;
  • Allowing the listing of Pre-IPO assets has further consolidated its leading position in synthetic U.S. stock trading.

Although Uniswap Labs previously restricted the access to tokenized stocks on the grounds of “changing regulatory environment” in July, it brought certain market sentiment concerns and regulatory uncertainty to Mirror Finance.

An overview of Terra's ecological development around UST's top-level design ideas

However, from the data point of view, as of August 29, Mirror’s lock-up volume (Terra+ETH, mainly Terra) was about US$1.87 billion , which was comparable to Synthetix’s US$1.9 billion lock-up volume during the same period. More importantly, Mirror Protocol has reached 26,794 transactions in the past 24 hours alone , and the transaction volume exceeded $10.53 million, which is significantly better than Synthetix’s performance.

Anchor Protocol fixed interest rate agreement (

As a low-risk fixed-rate income financial instrument, Anchor publicly promises to provide savings products with an annualized return rate of up to 20% . Even in the high-yield DeFi world, it promises to provide 20% annualized returns regardless of whether the bulls and bears are stable. It is also a very attractive investment option.

However, Anchor only accepts native staking proceeds as collateral for borrowing, that is, traditional PoS blockchain assets, including Ethereum , Polkadot , Cosmos, Solana, etc.

And their pledge derivatives on Anchor are called bAssets, just like bLUNA is the primary derivative of LUNA, the native asset of the Terra blockchain, and is currently the main force in the Anchor protocol collateral.

However, in early August, Anchor Protocol reached a cooperation with Lido Finance , the Ethereum 2.0 pledge agreement and launched bETH , which is considered an important step in the introduction of off-chain assets-as the mapping token of stETH in the Terra ecosystem, bETH can be used as collateral. Allowing users to obtain mortgage loans and Anchor liquidity mining rewards is also the first mainstream crypto asset to be introduced into the Terra ecosystem through Anchor.

An overview of Terra's ecological development around UST's top-level design ideas

As of August 29, Anchor Protocol’s locked-up volume (TVL) was approximately US$3.7 billion , and the total collateral value was US$2.34 billion , of which bLUNA collateral was valued at approximately US$2.09 billion , and bETH collateral was valued at approximately US$250 million. Although bBLUA still holds Mainstream, but the growth rate of bETH in less than a month is already very obvious.

And Anchor’s ambitions may also be here. Followed by the prosperity of PoS and the pledge ecology behind it, especially the further introduction of pledge assets such as ETH, SOL, ATOM, etc., by becoming a DeFi interest rate savings product covering mainstream PoS assets, Terra Eco serves as a key bridge to absorb multi-chain assets and ultimately feed back the needs of UST.

Other ecological sub-agreements

At present , several Terra ecological projects around UST, such as Prism , Nebula , Alice, etc., are lined up (to be launched ) . Most of them are in the stage of project improvement or even DEMO idea, and they are basically designed around Anchor for combined income design. It will be launched one after another in the next six months or so.

Orion Money cross-chain stable currency bank (

Orion Money, a cross-chain stable currency bank, is the winner of the Delphi Digital hackathon. It has built a cross-chain stable currency revenue aggregator that realizes aggregate revenue by converting stable currencies on different chains into packaged assets. In short, Aims to connect the stablecoin on Ethereum to the Anchor Protocol.

Therefore, the emergence of Orion Money can be regarded as a “supplement” of Anchor Protocol. It is more to fill the dilemma that Anchor Protocol only supports users to obtain stable income from stable currency UST and does not support other types of stable currency income. There are three main products planned. : Orion Saver , Orion Production Insurance and Orion Pay.

An overview of Terra's ecological development around UST's top-level design ideas

Not long ago, Orion Money has just launched its first product, Orion Saver Alpha, and will also launch some new versions, which may embed other revenue products and provide more high-value services.

Previously, Orion Money had completed US$1.7 million and US$7 million in financing on June 19 and August 12, respectively. Investors included Delphi Digital, a senior investor in the Terra ecosystem, and Terra co-founder and CEO Do Kwon and Anchor Protocol. General Manager Matthew Cantieri .

Mars Protocol Money Market and Lending Protocol (

Mars Protocol is built based on the dynamic interest rate model designed by the Delphi Digital team. It aims to become a currency market for assets in the Terra ecosystem and build a future bank that supports custody-free, open source, transparency, algorithm and community governance. The core goal is to absorb deposits and lending. , And manage the lack of liquidity and bankruptcy risks at the same time, thereby effectively improving the capital efficiency of each ecological ecology in Terra.

Recommended reading: “three minutes to read ecological loan Terra Association proposed Mars Protocol”

But unlike other traditional banks, Mars Protocol is a fully automated on-chain credit tool, managed by a decentralized community through a transparent governance process, and all decisions are made by the Martian Council committee. And its loan types are mainly divided into two categories:

  • Pledged

Pledged lending is similar to Compound. The pledge is first deposited into the agreement, and then the desired asset is borrowed according to the pledge rate. This part of the collateral deposited can also obtain interest rate income. Initially, the supported token types are UST, ANC, MIR, LUNA.

  • Non-pledged

Mars’ non-collateralized lending is not actually able to realize unsecured loans. The non-collateralized loan refers to the use of liquidity on Mirror and Anchor as vouchers, without the need to deposit tokens in Mars.

An overview of Terra's ecological development around UST's top-level design ideas

Pylon Protocol (

Pylon Protocol is a set of savings and payment DeFi products based on the Anchor protocol. It is used for payers and payees, consumers and creators, patrons and artists, investors and entrepreneurs, borrowers and lenders, and A new paradigm that encourages coordination is introduced among more relationships.

What is currently open is a launchpad for a fair project called Pylon Gateway , which allows crowdfunding and proceeds. Users deposit UST into a pool to receive a share of token distribution. The project’s tokens are distributed according to the proportion of investors’ shares in the pool.

The token “MINE” of the Pylon protocol mimics Luna’s minting/destroying role in the UST mechanism by absorbing the value of the tokens launched by the project on Pylon-up to 10% of the project startup proceeds will be used for MINE repurchase.

Prism liquidity agreement for future earnings   (

As another official flagship product launched by Terraform Labs, Prism Protocol allows users to sell the future income of their holding assets within a selectable period of time, so as to obtain liquidity through the borrowing of the future income, so that they do not have to face Any principal liquidation risk under the traditional mortgage model.

Alice High Yield and Instant Payment Network (

Alice uses Anchor’s rate of return to cut off all middlemen. Users can simply connect their own bank accounts to directly earn Anchor-based high-yield, and at the same time can realize simple and easy-to-operate instant encrypted payments between different accounts.

Nebula ETF Issuance and Investment Platform (

The information currently disclosed by Nebula is more like a multi-asset ETF issuance and trading platform positioned in the Terra ecosystem.

Terraswap asset exchange trading platform (

Terraswap is the official exchange and trading platform of Terra ecology, which can be used to trade Terra ecological assets-stablecoins such as UST, synthetic assets such as Luna, MIR, ANC and mAsset.

“Top-level design” around UST scenario requirements

At present, Solana, Fantom, and other competing public chains against Ethereum are in full bloom, covering various tracks such as lending, decentralized transactions, derivatives, and NFTs. The self-combination between protocols occurs like a chemical reaction.

Relatively speaking, Terra is extremely vertical. Whether it is a Mirror, Anchor that has a certain scale or an ecological project that is still in the (pre-) start-up stage, the meaning of “top-level design” is very obvious.

Each agreement has its own role. Through the “composability” under this design, different agreements gradually cover most financial scenarios such as investment and savings, realizing an increasingly obvious vertical financial public chain ecology, so that Terra The community once imitated “DeFi” and proposed the concept of “TeFi”.

And then under the background that the pie is getting bigger and bigger, how to coordinate the progress and combination arrangement among these dozens of ecological projects will especially test the development wisdom of Terra ecology. After all, this may be a phenomenon that does not need to be worried or even gratifying for Ethereum and others-the permissionless nature of Ethereum and the borderless combination, through high fault tolerance, brings endless imagination and order to the entire Ethereum ecosystem. An amazing innovation.

But for Terra, which has always adhered to the “top-level design”, it may not be a “sweet trouble”, because the “top-level design” type of open financial ecology has obvious advantages and disadvantages.

The advantage is that the ecological projects can be directly combined with each other like building blocks, so through the in-play scheduling designed at the bottom, the waste of resources can be avoided, and the synergy effect can be maximized, so that the ecological goal can be built at a high speed-in the last six months It is a more successful example that Terra backs up UST and the development of ecology through the underlying design of Mirror and Anchor.

But in the same way, the downside is that execution is extremely critical here, just as the overall impact caused by the delay of Mirror V2, Anchor, and Columbus-5 compared to the original plan.

How the agreement will be a combination of interlocking design , and to ensure timely delivery of a project to honor the agreement , to avoid a single ecological puzzle and dragged down the overall progress of the extension , it is the next Terra ecological development and expansion of the core essence lies.


Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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