Terra is now ranking as the second-largest blockchain network in staked value. Terra has surpassed the Ethereum 2.0 deposit contract, with more than 40% of eligible LUNA tokens being stated on the network.
The growth of this metric coincides with a significant uptrend in LUNA’s value. Over the past month, LUNA’s price has gained by 78% despite the recession across the broader market. At the time of writing, the token was trading at $85.22. LUNA is now the seventh-largest blockchain in total value locked (TVL).
LUNA is the second-largest blockchain in staked value
Terra LUNA is now the second most staked cryptocurrency by value. Staked value is not the same as total value locked (TVL). In terms of TVL, Ethereum is still taking the lead by a huge margin. Ethereum’s TVL stands at $109 billion, according to DeFiLlama, while Terra follows at a far second with $22.8B.
Around $28 billion worth of LUNA tokens have been staked on the Terra network. These staked tokens are used to boost the functionality of the entire blockchain. Solana is taking the lead in terms of staked value, with $35 billion worth of SOL tokens being staked into the protocol.
Staking tokens is a common practice among proof-of-stake blockchains. PoS is a consensus that guarantees security to a blockchain network by ensuring it will not be targeted by invalid transactions or blocks. Users are required to lock up native tokens into the network to stand a chance of being chosen as block validators.
The network will use the staked tokens to guarantee that the validators will propose valid blocks. If a validator proposes an invalid block, some of their staked tokens will be deducted. If the validator proposes a valid block that meets the consensus requirements, they get rewarded. The rewards are derived from the transaction fees linked to a block’s transactions.
Staking tokens into proof-of-stake blockchains allows cryptocurrency holders to generate passive income if they generate valid blocks. Networks that are popular and record high activity are usually popular with staking, as crypto holders determine where to stake their tokens by looking at the transaction fees.
Rewards on the Terra blockchain
The Terra blockchain currently offers an annualized reward of 6.62% on staked tokens. This is significantly higher than what is provided by other popular networks. For instance, the rewards on Ethereum 2.0 and Solana are 4.81% and 5.93%, respectively. The amount of rewards can be changed depending on the level of activity on a network.
Currently, 40.65% of eligible LUNA tokens have been staked on Terra. On the other hand, around 75% of SOL tokens are staked on the Solana blockchain. The Ethereum 2.0 deposit contract has now collected more than $25 billion worth of Ether tokens. This number is expected to increase significantly once Ethereum 2.0 is rolled out. The upgrade is expected to be rolled out later this year.
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