Binance will make Terra’s flagship savings protocol available to 30 million users.
A new staking program for TerraUSD (UST) was launched by Binance on Wednesday. Terra Luna’s (LUNA) cofounder Do Kwon, who is the co-founder of Terra Luna, attributed the high staking rewards to Terra’s anchor protocol, even though Binance did not name the underlying decentralised finance protocol.
UST is Terra’s algorithmic stablecoin, while LUNA is its equilibrium/governance token. According to Anchor, it operates as a digital savings account that allows users to deposit their USTs and earn an interest rate of up to 20%. Borrowers fund the savings rate by paying interest on UST loans and staking their income from their collateral.
A continuing imbalance between borrowers and lenders persists at the moment, with 12.4 billion UST in deposits being financed only by 3.47 billion UST in loans. This will require Anchor to use its reserves to pay out its APY. Terra.engineer, an unofficial tracking resource, indicates Anchor holds less than 340 million UST in its reserves, compared to approximately 450 million UST last month. Despite declining reserve counts, the Terra development team is taking steps to maintain protocol, including introducing more reserves and methods for generating income.
LFG plans to increase BTC reserves to $10 billion
According to the official Bitcoin (BTC) address of Luna Foundation Guard (LFG), the organization bought another 5,040 BTC ($222 million), now totaling 35,768 BTC ($1.577 billion). As part of its January launch, LFG hopes to grow the Terra ecosystem and improve the sustainability of its stablecoins. Do Kwon had outlined his plans to create a decentralized foreign exchange reserve for the UST, utilizing both LUNA and BTC. As part of LFG’s plans, it plans to increase the BTC reserves to $10 billion. Additional purchases will depend on how much UST is minted after that point.