Why Stake UST
Many crypto enthusiasts first heard the term “staking” in the context of staking Ethereum. Now, there are more and more options on the horizon for staking stablecoins.
Last week, Coinmetro introduced UST staking. Did you know that Coinmetro is one of the only places in the world to offer rewards to users who stake UST? On top of the UST staking interest, you also have the opportunity to earn additional UST when staking XCM, Coinmetro’s native utility token through our unique Multi-Asset Rewards (MARs) program.
Let’s explore TerraUSD (UST) and the other reasons that make it a standout staking option!
The TerraUSD (UST) algorithmic stablecoin was released in September 2020 to benefit the users and the community of the Terra Ecosystem. The stablecoin’s most prominent features include increased scalability, yield-bearing, and interchain usage
If you’re struggling to understand what “algorithmic stablecoin” means, here’s an explanation: the cost of minting an algorithmic stablecoin equals the face value of minted stablecoins, which, in turn, ensures increased scalability.
Tied to the US Dollar, UST uses LUNA, Terra’s other main token, as a reserve asset. When 1 UST is minted, Terra burns $1 worth of LUNA.
Furthermore, UST uses the Dropship bridge technology to connect to a wide range of DeFi (decentralized finance) and DEX (decentralized exchange) systems, like Coinmetro. It also enables moving assets between chains and ensures a steady UST cost resulting from the Dropship protocol’s scalability.
Additionally, Terraform Labs plans to accumulate $10B worth of Bitcoin to add to the project’s stablecoin reserves. The reserves are intended to support and further stabilize UST.
Why Stake UST
The scalable, interest-bearing, and interchain UST finds its use in a variety of services and products, which definitely hints at the coin’s bright future.
Due to the fact the minting mechanism of UST is unique, DeFi protocols use UST without losing scalability.
Another solid area of interest is UST’s yield-bearing capabilities. The profit of the Anchor Protocol on the Terra platform depends on block rewards in UST from Proof-of-Stake (PoS) chains existing in the PoS space. Dropship supports this interchain operability, allowing UST to easily move between chains.
One more exciting use for UST is in dApps (decentralized applications). For example, the Mirror Protocol uses UST as a bare asset. Mirror is a protocol on the Terra Network – and one of Terra’s recent introductions – powered by smart contracts. It enables the creation of the so-called mAssets (Mirrored Assets). In a nutshell, mAssets are synthetic assets that track the price behavior of real-world assets.
To sum it up, UST makes for an excellent staking option because you can get UST staking interest, earn additional UST when staking Coinmetro’s very own tokens, and, last but definitely not least, you will be HODLing a valuable asset.