It is no secret that it's been a tough ride for the crypto investors in the last few days, with the global crypto market cap bleeding red to date. However, just like the conventional equity market, the turbulent periods could be a great time to pick certain quality names that have shown little progress. Despite the downtrend in the crypto market over the past few days, Tron and Terra have had some positive developments. Let's look at them in detail and determine which of these would be a better option to invest in.
Terra:
Terra is essentially a blockchain payments platform meant for stablecoins and depends on maintaining a balance between 2 kinds of cryptos. UST, the Terra-supported stablecoin, is linked to the values of stable physical currencies. Meanwhile, its counterpart, Luna, runs the Terra payment platform, and it's mainly used to make more of the Terra stablecoins.
Though Terra is 30% down from its long-standing prospects, its stablecoin, UST, continues to remain in demand and currently covers an $18.5bn crypto market cap. Do Kwon, the co-founder of Terra, is still purchasing more of Bitcoin to add to the project's stablecoin reserves while building a $10bn Bitcoin treasury, with investors still parking UST in the Anchor Protocol Terra to gain 20% APY (Annual Percentage Yields).
Besides, there's also a $29bn of total value blocked in Terra. That's more than Terra's present market cap worth $28bn. Though there might be a little volatility ahead, Terra still seems like a crypto investment that most investors want to purchase and hold on to for long. However, before investing in Terra, ensure that you know the present Terra to INR rates.
Tron:
Talking of stablecoins, Tron hopes to imitate Terra's success by launching its own stablecoin, called USDD, on the 5th of May this year. USDD is available on Ethereum, Binance, and Tron smart chains. Tron is among those cryptocurrencies that have enjoyed a profit in the last few days, posting an increase of 6% last week as curiosity built for the launch of USDD.
Just like Terra's UST, Tron's USDD will also be backed algorithmically. If the value of USDD drops to $1, the traders have the choice of exchanging 1 USDD with $1 Tron. However, if the value of USDD exceeds $1, the traders have the choice of exchanging $1 Tron for USDD. Such a mechanism should aid in maintaining the price of USDD at $1. The growing popularity of UST, in terms of minting and price stability, has played a major role in the success of Terra, and Tron also aims to gain the attention of new investors on similar grounds.
So, which is better, Terra or Tron?
Terra's UST functioned with no issues in the crypto market unless the Bitcoin's fall below $35,000 per coin caused panic among the traders and increased outpours from UST.
UST lost momentum for a brief time, owing to the huge fall in the exit liquidity, causing its value to fall below $1. That now questions the reliability of the recent Tron USDD stablecoin launch, which has changed things quite a bit. Terra offers a 20% interest rate on its UST stablecoin, while Tron aims to outbid Terra by offering a 30% interest rate per annum on USDD at the beginning. It's unlikely that Tron would leapfrog Terra; however, it's likely that such a yield would bring in more investors to buy Tron for first time.
USDD should positively affect the performance of Tron in the cryptocurrency market. But considering the bearish condition of the market at the moment, it will be quite interesting to observe how the Tron rally turns out. That said, Terra also has plans of its own. With all-new metaverses being launched, new non-replaceable airdrops and sales planned, we will have to wait to see what this innovative protocol offers.
