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Terra proposes $139 million incentive plan to boost UST liquidity and deploy multi-chain infrastructure

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Terra proposes $139 million incentive plan to boost UST liquidity and deploy multi-chain infrastructure

Terra LUNA proposes to inject approximately $139 million worth of UST and LUNA into Ethereum, Solana, and Polygon over the next six months to further enhance UST liquidity and deploy cross-chain solutions. The proposal has gained strong community support, with UST rising to the 20th position by market capitalization, surpassing DAI by 4 ranks.

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$139 Million Proposal

According to a proposal released by ezaan, a member of Terra's development team Terraform Labs, on 1/6, the plan is to provide liquidity incentives for various DeFi projects across different chains to increase the adoption and liquidity of UST.

OlympusDAO Ethereum, Solana, Polygon

The algorithmic stablecoin protocol OlympusDAO OHM previously planned to introduce UST bonds on Ethereum, a proposal that has been approved. The proposal includes:

  • Offering Luna rewards of $255,000 for gOHM-UST on Terra.
  • Offering Luna rewards of $85,000 for gOHM-UST on Solana.
  • Offering Luna rewards of $85,000 for gOHM-UST on Polygon.

In addition to the daily 0.08 gOHM governance token rewards for trades on Olympus and the Astroport ASTRO rewards on the Terra chain, the total rewards amount to approximately 1.425 million UST.

Rari Fuse Ethereum

Due to high demand for borrowing gOHM on the Rari Fuse lending protocol, the proposal plans to deposit $20 million UST into pools 6, 18, and 7 on Fuse.

Convex Ethereum

The proposal will inject 18 million UST into multiple UST pools on the revenue aggregator protocol Convex Finance. The Terra community will monitor market changes and Convex/Curve strategies and adjust reward mechanisms if necessary.

Tokemak Ethereum

The proposal initially planned to deposit $50 million UST into the liquidity protocol Tokemak, but the community suggested increasing it to $100 million UST.

InvictusDAO Solana

Olympus mimic InvictusDAO, with support from Terra and Frax, proposed to introduce UST, UST-IN LP, and FRAX bonds to replace USDC/USDT in the reserve assets. The proposal requires Terra and Frax Finance to collateralize 250,000 UST.

Due to the market pullback, this proposal led to an increase in LUNA's price, which was $70.59 -6.3% at the time of writing. However, UST's market cap has surpassed DAI by four places, with the co-founder of MakerDAO previously referring to UST and MIM as a Ponzi scheme.