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SOL & LUNA DeFi Explosion, Anchor & Lido Symbiosis Drives UST Demand

Aug 17, 2021 · 3 min read

By Jeremy Ong, and Joo Kian

Market Update

All around, markets look indecisive today as majors continue ranging. SOL and LUNA have been stand outs, hitting fresh all-time highs. Other tokens such as YGG, AXS, GRT, AVAX, SUSHI, AUDIO are also having a great day.

Solana & Terra DeFi TVL Breach New Highs

  • Two of the biggest gainers in terms of ecosystem TVL, on a relative rather than absolute basis, are the “sun & moon” L1s – Solana and Terra. The jump in both of their TVLs is likely due to the sharp price increase in SOL and LUNA, the native assets of each network.
  • Ethereum DeFi TVL is also teetering close to all-time highs. It’s dominance relative to its peers remains largely unchallenged.

Anchor & Lido Key Driver For Terra’s TVL Growth

  • A key catalyst for the growth seen in Terra’s TVL has been the start of Anchor accepting bETH (stETH) as collateral. Coupled with Anchor’s borrow-to-mine ANC program, demand for UST has increased as a result.
  • For context, outstanding UST loans on Anchor increased by more than $200m since the introduction of bETH as collateral.

Anchor & Lido’s Symbiotic Relationship

  • As you might already have guessed, Anchor & Lido have a symbiotic relationship. Anchor has a new yield-bearing, lower vol collateral that it can offer to users, while Lido’s utility benefits from the new integration.
  • At the time of writing, the stETH that is deposited in the Anchor Vault contract is responsible for 6% of total stETH in circulation. That’s a lot in just a few short days!

Notable Tweets

GaryVee imparts some wisdom.

Terra ecosystem milestones.

SuperRare announces token plans.

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