After the recent market drop, most of the cryptocurrencies have been struggling to stay bullish. Bitcoin for example is struggling to regain $50K and it is currently trading at around $46,055. But on the other hand, LUNA quickly recovered from the fall and set a new all-time high amid the larger market sell-offs.
Terra is currently trading at $75, 0.69%, after gaining 25.95% in 7 days and it ranks at position 9 with a total market capitalization of $27.84 billion ahead of Avalanche and Polkadot from the market cap resulting in the current market.
Why Terra (LUNA) price is rising
Terra has been performing well over the last months, and today it has already set a new all-time high above $81.
One of the main contributors to the Terra (LUNA) price hike is the growing DeFi ecosystem that has significantly contributed to the Terra platform’s growth. According to data obtained from the Dafilama, before the market sell-offs, the total value locked up in all DeFi platforms had fallen drastically. However, the altcoin dominance in the DeFi space is currently seeing exponential growth.
The key surge in the market prices has been the increase in the TVL and the Terra rise in the DeFi sector which shows a higher institutional interest in the network. Additionally, the altcoin development activity that started at the end of November saw a significant increase.
The percentage of stablecoin total supply held by whales with more than 5 million USD is also held at a higher level.
The ecosystem has played a major role in making the market more interoperable rolling out many stablecoins like the International Monetary Fund’s TerraSDR TerraCNY, TerraGBP, TerraEUR, TerraUSD(UST), TerraKRW, and Terrajpy
The stablecoins helped to cater to the retail crowd by enabling the use of the network for retail payment services, collectively, all this helps in fiat deposits interoperability.
Terra recently announced its partnership with Anyswap Network protocol to bridge layer-1 and layer-2 blockchains, this will help in the connectivity of UST and FTM through a cross-chain bridge. This will boost the usage of LUNA tokens, resulting in a price rise.
Lastly, in the last week of November over 7.2 million of LUNA was burned, however, this was countered by the recent changes in the issuance model of Terra which pumped the price.