Terra (LUNA) Announces Plans to Deploy $139 Million to Five DeFi Projects
Terra (LUNA) recently announced its decision to distribute $139 million across five different DeFi projects in order to secure new use cases for UST. The projects in question are spread across different blockchains, including Ethereum, Polygon, and Solana.
However, before the project can go through with it, its proposal first needs to be accepted by the Terra community. LUNA holders who participate in the project’s governance will get the chance to vote on the proposal and decide whether or not the grants will happen.
What does Terra intend to do?
Terra explained its plan in a document called “UST Goes Interchain: Degen Strats Part Three.” The document contains details on how the project aims to use LUNA and UST on different DeFi platforms.
The proposal also revealed that Terra identified several partner protocols and that it plans to deposit up to $50 million to support their stability. By doing this, its goal is to bring UST use cases to Ethereum’s DeFi sector.
The project’s intentions align with the previous comments of its founder, Do Kwon. He noted that he wishes to see UST become a dominant stablecoin in the crypto industry, and spreading it throughout DeFi protocols on three different blockchains will certainly help in achieving that goal.
As of right now, TerraUSD (UST) has a market cap of $10.44 billion. This makes it the 4th largest stablecoin, following Tether (USDT), USD Coin (USDC), and Binance USD (BUSD).
Which projects did Terra select?
The project plans to utilize $139 million by splitting it and granting it to several projects, which include:
1) Tokemak
This is an Ethereum-based DeFi protocol that acts as a liquidity provider and market maker. Terra will deploy $50 million in UST for a minimum of six months to support UST Pair Reactor. Other than regular rewards coming in the form of TOKE, the asset will also provide Terra community with the ability to vote in the LUNA Token Reactor.
2) InvictusDAO
Next, there is InvictusDAO, which is based on Solana’s network. This project acts as a decentralized reserve currency, and it came to be as a fork of another project called Olympus. Since then, it became a rather promising player, and Terra wishes to see it become bigger and better, which is why it will create a bond between IN and UST. It will contribute $250,000 to the project, and its donation will be matched in full by Frax Finance (FRAX).
3) OlympusDAO
Next, there is OlympusDAO — a project from which Invictus forked, which is actually based on all three — Ethereum, Solana, and Polygon. The project is an OHM-based decentralized reserve cryptocurrency protocol, and Terra has great plans for this one. This is why it aims to deploy $1.425 million to it. The project is already working with Terra, and this partnership will also bring OlympusPro to Terra protocols.
4) Rari Fuse
Finally, the last one is a project called Rari Fuse, which is an unlicensed lending and borrowing platform. This one will receive $20 million in UST, and in turn, it will make UST the cheapest stablecoin to borrow on Fuse. This is expected to make the coin more attractive to borrowers and boost its usage.
To learn more about this token visit our Investing in Terra guide.
