Proposal: Add UST as a Collateral Asset

Hello, I’m a member of the Terra team. This is my second time posting about this, as UST has seen a significant increase in demand since my last post.

Token Overivew:

TerraUSD (UST) is an algorithmic, seigniorage-based stablecoin issued by Terraform Labs
(TFL). UST is one of the fastest growing algorithmic stablecoins to-date. Its market
capitalization has grown to over $250 million since its inception on October 1.

TFL currently uses Shuttle (https://github.com/terra-project/shuttle#terra--ethereum) to bring
Terra assets, including UST, to Ethereum. At the time of this writing, the supply of erc-20 UST is
roughly $70 million. UST currently has a daily trading volume of ~$100 million.

UST is the primary stablecoin used on Mirror Protocol (https://mirror.finance/). UST pools also exist on a number of Ethereum-side applications, including Curve, Uniswap, Sushiwap, Balancer, etc.
The Uniswap UST-USDT pool currently has ~$25M of liquidity. https://info.uniswap.org/pair/0xc50ef7861153c51d383d9a7d48e6c9467fb90c38

Additional details on UST can be found here:

● Blog: https://medium.com/terra-money/announcing-terrausd-ust-the-interchain-stablecoin-53ea
b0f8f0ac
● Website: https://terra.money/
● Docs: https://docs.terra.money/contracts/#growing-active-user-base-with-real-world-usage
● Contract address: https://etherscan.io/token/0xa47c8bf37f92aBed4A126BDA807A7b7498661acD

Motivation:

Mirror Protocol (https://mirror.finance/ ) has recently been launched, driving demand for UST.
We believe borrowing/lending markets are the next step in helping UST mature as a stablecoin.

Audits:

Terra security audit conducted by Certik: https://certificate.certik.io/reports/terra.pdf
Mirror security audit conducted by Cyber Unit: https://docsend.com/view/p4es2dgvwadamgqg

Benefits to CREAM:

  1. Adding UST would add diversity to the different stablecoin asset types and decrease aggregate risk of the CREAM ecosystem
  2. Diversity of users from both the Terra community (and broader Asia)
  3. Mirror Protocol has recently been launched, driving demand for UST. UST is not yet listed on any lending protocols. As a result, we believe adding UST will expand TVL of the CREAM protocol
1 Like

What’s the price risk for UST? Under what situations does UST price drop?

Price drops when demand for UST decreases, but we have a built in mechanism to help keep the price to peg. See below for a blurb about how this works:

TerraUSD is an algorithmic stablecoin, where the cost of minting is equal to the face value of the stablecoins minted — in order to mint 1 TerraUSD, only $1 worth of the reserve asset ($LUNA) must be burned. TerraUSD monetary policy is infinitely scalable — helping DeFi apps and protocols achieve their full potential without restrictions.

Update since last post:

  • UST market cap has grown to ~$580M (double market cap from two weeks ago)
  • erc20 supply has grown to $130M

The voting has started

Can you describe how Shuttle bridge works? Is it a PoS bridge? Who are the bridge validators?

The shuttle from Terra chain to ETH and BSC is currently centralized , the TFL team is looking in to migrating to a decentralized bridge in the near future. You can find the source code and more information here https://github.com/terra-project/shuttle