Prominent investor speculates why Terra’s algo-stablecoin (UST) triumphed over Synthetix (sUSD) |

On January 18th, prominent investor and author Michael J. Tierney published a blog post regarding the recent launch of Terra’s algo-stablecoin (UST). The article suggests that UST may have triumphed over Synthetix’s sUSD due to its stronger team composition.

The “ust stablecoin reddit” is a post that speculates why the UST cryptocurrency triumphed over the Synthetix (sUSD) cryptocurrency.

Prominent investor speculates why Terra’s algo-stablecoin (UST) triumphed over Synthetix (sUSD) |

As the market capitalization of Terra’s algorithmic stablecoin that follows the value of the US dollar surpassed $8.5 billion, investors wonder what is driving adoption and how UST managed to outperform the competition.

The decentralized stablecoin industry continues to expand at a fast pace, fuelling the DeFi market.

Because of its widespread use, this kind of cryptocurrency has emerged as an unquestionably important component of the ecosystem.

Adoption

The rapid popularity of UST has sparked a Twitter conversation, with Kyle Samani, co-founder of crypto investment company MultiCoin Capital, asking his followers for their thoughts on what differentiates Terra’s decentralized stablecoin from its counterparts, particularly Synthetix’s stablecoin sUSD.

What’s your best guess as to why the sUSD hasn’t taken off as the UST has?

— @KyleSamani (@ksam.sol) December 8, 2021

Terra’s native stablecoin employs LUNA as a reserve asset, and a dollar-equivalent quantity of LUNA is burnt every time someone mints UST.

LUNA, Terra’s native token, has risen to the top ten cryptos, gaining more than 8% in the last seven days despite the market downturn.

According to CoinMarketCap, the UST market valuation gained 197 percent in the last month, up from 10.5 percent in the previous month.

Prominent investor speculates why Terra’s algo-stablecoin (UST) triumphed over Synthetix (sUSD) |

UST uses yield-bearing and interchain capabilities, while the mint–burn process connects the two cryptocurrencies together in a scalable monetary policy.

Utility

“However, UST has an advantage over other decentralized stablecoins in that it is not competing with DAI on its native field,” Ryan Watkins stated.

However, UST has an advantage over other decentralized stablecoins in that it is not competing with DAI on its native field.

Rather than aiming to compete with DAI on Ethereum, UST is focusing on Terra and actively growing multichain.

Ryan Watkins (@RyanWatkins_) (@RyanWatkins_) (@RyanWatkins_) (@Ryan 15 September 2021

“Rather than aiming to rival DAI on Ethereum, UST is establishing its own ecosystem on Terra and actively growing multichain,” according to Messari’s researcher.

That was the idea, and Do Kwon has carried it out flawlessly so far– the co-founder and CEO of Terraform Labs, the South Korean firm behind the blockchain project Terra, projected two months ago that demand for UST in cross-chain scenarios would grow at this pace.

He wasn’t exaggerating when he said the protocol’s native stablecoin might achieve a market value of $10 billion by the end of the year.

Following the network’s crucial Col-5 update, the development of the blockchain was sparked toward expanding cross-chain compatibility and drawing an army of projects–all with the goal of increasing UST use and acceptance.

By volume, Osmosis is the third biggest exchange for $UST (after CEX and DEX).

It’s just the beginning… https://t.co/7z9JJCEYvf

December 8, 2021 — Osmosis (@osmosiszone)

Competition

The popularity of sUSD, a Synthetix-based synthetic stablecoin that follows the value of the US dollar, has stagnated. According to CoinMarketCap, its market cap, which is presently $142 million, has been declining since August.

Prominent investor speculates why Terra’s algo-stablecoin (UST) triumphed over Synthetix (sUSD) |

The protocol’s governance token, SNX, is an ERC-20 token whose staking allows for the creation of synthetic assets, or Synths, on the Ethereum blockchain using the Mintr dapp.

Although the price of SNX has increased by 109 percent in the last year, the protocol’s governance token has dropped by 19 percent in the last month.

The fact that sUSD, which is heavily collateralized by SNX, arrived at a time when demand for decentralized stablecoins was on the increase wasn’t enough to pique investors’ interest, as UST did. Those who responded to Samani’s query brought up a few points.

They said that sUSD couldn’t compete with UST since it is a more gas intrusive choice with a lower yield.

collateral capital efficiency, UST return, and low transaction costs

December 9, 2021 — Jason Choi (@mrjasonchoi)

“Second, and perhaps more importantly, the amount of activation energy needed is enormous. It was used behind UST but not sUSD, according to Jon Kol, Director of Galaxy Digital’s Principal Investment division.

For two reasons: first, compare the minting of one against the other.

Second, and perhaps more importantly, the amount of activation energy needed is enormous. It was used in front of UST, but not in front of sUSD.

December 9, 2021 — Jon Kol (,) (@thePalenimbus)

Prominent investor speculates why Terra’s algo-stablecoin (UST) triumphed over Synthetix (sUSD) |

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The “is ust stablecoin safe” is a question that has been asked by many. The answer to this question is yes, but not everyone agrees. Some investors believe that Terra’s algo-stablecoin (UST) triumphed over Synthetix (sUSD) because of the lack of volatility in UST.

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