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LUNA Now Second-Biggest Network In Terms of Staked Value

As Terra ascends the ranks of the top ten cryptocurrencies, its popularity as a yield generator continues to soar. It is now the second most staked crypto by value, surpassing even Ethereum 2.0.

Staking VS DeFi

To be clear, this “staked” value does not refer to the “total value locked” in the DeFi protocols on various blockchains. Ethereum still dominates in this arena, with $110 billion locked out of the total $200 billion across all of DeFi.  Terra remains at a distant 2nd with $23.7 billion TVL on the network – an all-time high.

However, when compared to other proof of stake blockchains, nearly $28 billion worth of LUNA is now devoted to keeping the blockchain functional. That makes it the top chain for staking besides Solana, where $35 billion worth of SOL is staked.

Proof of stake is a consensus mechanism that helps prevent a blockchain network from being spammed with invalid transactions/ blocks. It requires users to lock up their cryptocurrency for a chance to be selected by the network to validate a block.

If a validator proposes an invalid block, he loses some of his staked coins. Alternatively, if he presents a block that follows the consensus rules, he is rewarded with all of the transaction fees attached to that block’s transactions.

This presents an opportunity for crypto holders on proof of stake networks to earn passive income by simply staking their coins, and creating valid blocks. High-value networks with plenty of activity and transaction fees are especially popular for this.

Rewards on Terra

Right now, Terra effectively provides a 6.62% annualized reward on staked coins. That’s above Solana and Ethereum 2.0’s rewards of 5.93% and 4.81% respectively. These rates are subject to change as network activity rises and falls, or as the staked value on a network increases or decreases.

So far 40.65% of eligible Terra is being staked. By contrast, nearly three-quarters of available SOL are staked on Solana.

Ethereum is yet to upgrade to Ethereum 2.0, but the deposit contract has collected over $25 billion in Ether so far. This can be expected to increase drastically after the upgrade, which is expected before July of this year.

Terra’s current price is $90.57, with a market cap of over $33 billion.

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