Terra Luna overtakes Ether as second-largest staked crypto

A strong price surge over the last week has made Luna, Terra network’s native token, the second-largest staked asset in terms of staked value. There is currently $30-billion worth Luna being staked across various platforms, toppling Ether which had a little over $27.5 billion in staked value at the time of writing. This is according to a report by Staking Rewards, a leading data aggregator for cryptocurrency staking.

Luna is one of the two tokens of the Terra blockchain. The network also uses the UST token (Terra USD), a stablecoin pegged to the US dollar, to facilitate global payment systems.

Staking is the process of pledging crypto assets to the blockchain in order to become a transaction validator (or node) on the network. As nodes consume computing power to authenticate transactions, the blockchain rewards them in its native token every time a block of transactions is authenticated and added to the chain. Staking is possible only on blockchains that use the Proof-of-Stake (PoS) ‘consensus mechanism.’

According to Staking Rewards, 40.58 percent of all eligible Luna tokens are being staked at the moment. The data also reveals that a major share of Luna tokens is being staked on cross-chain protocol Orion Money, with 42,960 users staking $1.5 billion worth of Luna tokens. Terra offers 7 percent of the staked value as a reward for staking Luna tokens. Solana offers only 5.86 percent, yet it remains at the top of the leader board in terms of staked value.

Data pulled from Defi Llama, a leading Total Value Locked (TVL) aggregator in the decentralised finance (DeFi) space, shows that the Terra network has $23.53 billion worth of assets locked in. TVL is the total value of crypto assets locked in any DeFi protocol. Terra’s TVL is still far behind Ethereum’s $113.34 billion. However, Luna is not just performing well in the DeFi space but is also looking strong on the price charts.

Despite the heavy market correction and volatility, Luna maintained an uptick over the last week and is currently trading at $92.2 on coinmarketcap. The seven-day surge from $51.9 represents a jump of nearly 78 percent. Luna’s price performance beat Bitcoin and Ether’s nearly 23 percent gains in the same period.

The price movement was triggered when the Luna Foundation Guard (LFG) launched an over-the-counter (OTC) sale of Luna tokens. The foundation mentioned that the proceeds of those sales shall be directed towards “establishing a Bitcoin-denominated Forex Reserve for UST.” Terra’s process of burning UST tokens has also fuelled the price rally.

“Although the widespread adoption of UST as a consistently stable asset through market volatility should already refute this, a decentralised reserve can provide an additional avenue to maintain the peg in contractionary cycles that reduces the reflexivity of the system,” said LFG to Binance.

Terra has seen a massive growth spurt in adoption among the layer-1 protocols. Binance experts believe that it is well poised to seize a slice from Ethereum’s market capitalisation. This is because it already hosts 13 DeFi protocols in a very short span of time. However, as mentioned earlier, Solana still has the top spot on the staking charts, with $38.2 billion being staked at the moment.