Over the past few months, UST’s market cap has seen explosive growth, moving to 18.7B. Terra’s governance proposal 721 recently stated “UST interchain expansion must continue to new realms” and “the Terra community pool should enact [UST-aaS with Ondo] to further utility.”
On March 29, the Terra community approved the proposal, which included other partnership suggestions, with 97% positive votes. Terra have subsequently allocated 20M UST to UST-aaS and will not have to return to governance until this liquidity has been fully deployed.
UST-aaS makes it possible for token issuers to increase the liquidity of their token on decentralized exchanges across multiple blockchains. Indeed, this partnership brings new liquidity solutions to DAO’s that run on Avalanche, Fantom, Polygon, or BSC where their current UST supply is respectively 70m, 24m, 5m, and 5m.
Token issuers who utilize UST-aaS will achieve twice as much liquidity from the same amount of capital, while earning trading fees and rewards which reduce (or even negate) IL risk and the cost of capital.
UST-aaS enables projects to safely and cost-effectively obtain UST liquidity without having to conduct a raise or sell holdings. Token issuers are also able to capture more upside than a traditional liquidity pool if the value of their token increases.
With UST-aaS, a project deposits its token into an Ondo liquidity vault with a fixed duration. Terra will match those deposits with an equivalent amount of UST to form a liquidity pair. Ondo then supplies this liquidity to a decentralized exchange.
Upon expiration, Ondo withdraws the liquidity and pays back Terra their principal plus a fixed APR. The token issuer then receives all remaining returns in their native token.
Any of the allocated 20M UST that isn’t used for UST-aaS will be returned to the Terra community pool in 6 months, however, UST-aaS may be expanded in the future if proven to be successful.
We are delighted to announce that we have already agreed our first UST liquidity partner. Nine Chronicles is a decentralized fantasy MMORPG on Ethereum mainnet with an in-game currency, WNCG.
Terra will deposit an initial 2M UST into the fixed tranche of Ondo’s liquidity vault, with Nine Chronicles depositing an equivalent amount of WNCG into the variable tranche. This will form the first liquidity vault which will commence 18 May, with a duration of 12 weeks.
Terra and Nine Chronicles will repeat this process for a second vault which will commence 29 June for a duration of 12 weeks. This will bring the total liquidity supplied to $8M.
Explore the fantasy world of Nine Chronicles.
We are in discussions with other projects such as a DAO that seeks to grow liquidity on the Avalanche blockchain. If you know of another project that may benefit from UST-aaS, please reach out to our team while UST liquidity is available.
With small adjustments, Ondo vaults are well-suited to facilitate direct listings to establish the first liquidity for a token. Saddle was the first project to do so recently.
UST is the largest algorithmic stablecoin by market capitalization, and the third-largest stablecoin overall, behind USDC & USDT.
Nine Chronicles is a fantasy MMORPG that runs on the blockchain.
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