TerraUSD is a stablecoin that debuted in 2020. It’s designed to be decentralized, scalable, yield-bearing, and compatible across chains. That means it can be deployed across multiple ecosystems and applications. One major reason it stands out is its mostly infinitely scalable approach to monetary policy. As stablecoin demand has grown, it became apparent that many options don’t truly scale. In response, TerraUSD was built-at least in part-to challenge DAI, the market leader in stablecoins.

Terra, the organization behind TerraUSD, was founded by Do Kwon and Daniel Shin in April 2019, and it operates as part of Terraform Labs. On September 12, 2020, Terra published TerraUSD on Bittrex Global. Terra is TerraUSD’s native blockchain.

What are USTC key features and how does it work?

Terra relies on a set of straightforward protocols and policies to support TerraUSD’s core traits, including scalability, yield generation, and interchain functionality. TerraUSD also draws on existing technology and improvements, with the goal of delivering the best possible user experience.

TerraUSD is an algorithmic stablecoin, so the minting cost matches the face value of the stablecoins created. It uses LUNC, Terra’s native cryptocurrency, as its reserve asset. In practical terms, minting one TerraUSD requires burning $1 worth of Terra’s LUNC from the system.

What is noteworthy about TerraUSD?

A defining characteristic of TerraUSD is its ability to connect and activate blockchain ecosystems. This is made possible via a bridging protocol named Dropship. In short, Dropship enables TerraUSD to be integrated into different DeFi platforms and allows it to move from one blockchain to another. This mechanism is intended to support scalability. To mine the token, validators on the Terra Network stake LUNC. Those validators act as oracles for the dollar value of LUNC. In return, they receive small amounts of tokens tied to USTC transactions.

What can USTC be used for?

Because TerraUSD is positioned as highly scalable, interest-bearing, and usable across chains, it opens up a wide range of potential applications. DeFi platforms can rely on it without giving up scalability, since USTC can meet high demand thanks to its minting approach. One area that has drawn strong interest from Terra users is yield, or interest-bearing functionality. Anchor’s interest or earnings on the Terra network are linked to block rewards in USTC from PoS chains operating within the PoS environment. This cross-chain compatibility is reinforced by the Dropship bridging protocol, which helps UST move between blockchains.

USTC can also be used in dApps. For instance, Mirror protocol-a system for minting fungible “synthetic assets” that reflect real-world asset prices-uses USTC as a reserve asset. Finally, USTC can be included as a payment option through e-wallets like Chai and MemePay.

Where can you buy TerraUSD?

USTC can be purchased on any of the DEXs and CEXs listed here.