- Summary:
- Venus Protocol has integrated UST and LUNA stablecoins to its ecosystem. What are the implications for users?
The Venus Protocol has announced the integration of LUNA and UST into its ecosystem. The development is proof of the two tokens’ growing demand and Venus Protocol’s fast growth in the decentralized finance space. The UST and LUNA tokens are both stablecoins from the Terra (LUNA) network. Supported by key decentralized applications (dApps) such as Curve, Unswap and Sushi Onsen, TerraUSD (UST) has found major use cases in the open DeFi ecosystem.
Additionally, UST offers price stability in a highly volatile crypto market and has censorship resistance. Also, it is designed to support instant settlements and cross-border payments. Because it is an algorithmic stablecoin, UST stands out from other stablecoins. Notably, it is highly scalable, censorship-resistant, and able to cushion users from insolvency and collateralization.
LUNA is central to maintaining stability in the Terra ecosystem. For Terra’s stablecoins to remain stable, it uses LUNA for arbitrage incentives. Whenever stablecoins like UST shift too widely from their pegged values, Terra’s market module incentivizes users to swap their LUNA and UST, resulting in the restoration of parity.
The addition of UST and LUNA means that holders can expect robust and reliable decentralized loaning opportunities. Venus users who stake their coins can borrow against their assets without undergoing cumbersome credit checks. Also, they can earn decent APY on their funds held in the Protocol, depending on the prevailing market demand. Additionally, Venus Protocol allows users to mint synthetic stablecoins backed by their crypto holdings. That is a significant deviation from other money market platforms.
About Venus Protocol
Venus Protocol is a DeFi platform built on the Binance Smart Chain ecosystem. Because it operates on BSC, Venus offers users cheaper and faster collateralization and minting of synthetic stablecoins. Also, users can borrow against their crypto held in the Venus pool through an over-collateralization model. The XVS token is the Protocol’s governance token, and users can earn it by providing liquidity or participating in the Binance Launchpool.
Notably, the Binance Launchpool has 20% of the token, representing 6 million tokens, while 1% goes to the BSC grants program. The remaining 69% (23.7 million XVS) belongs to the Protocol and users can mine them at a rate of 0.64 XVS per block.