#877 The $10 Billion Bitcoin Bet On Stablecoins

Terra's move to back UST with Bitcoin is worth paying attention to. There are lots of risks, but if they are successful in pulling this off, then they will be creating a playbook for other stable coins and/or central banks to follow. Bitcoin is a decentralized digital currency that has successfully achieved the properties necessary to serve as superior collateral. As more people recognize this achievement, I would anticipate many other assets to adopt the Bitcoin standard.

A simple framework to evaluate LUNA is that the more Terra is used, the more LUNA is worth.

The stable coin at the heart of this ecosystem, Terra USD, or UST as it's known, sits at more than $15B in market cap. This is the fourth largest stable coin in the market behind Tether, USDC, and Binance USD.

There's approximately $100M to $200M of new demand for UST per day.