Terra has established itself as an attractive source for non-dilutive revenue for validators.
Hello Defiers! Our latest app Infinity Vest is growing. Have a look at attached snapshot below:
Contributor: Christopher Heymann, Partner at 1kx
- After being live now for 17 months on mainnet, Terra has established itself as an attractive source for non-dilutive revenue for validators. Currently, 54 validators from 18 nations provide security to the Terra network, with a fairly even distribution between North America, Europa, and Asia.
- Terra continues to have a robust staking ecosystem. Peak delegation activity since Columbus-3 was launched occurred in the week of June 14, 2020, when 35 million LUNA (~$10.5m at today’s prices) were bonded. Total delegations have increased from 172 million LUNA in December to now over 298 million LUNA, an increase of 73% in delegated tokens.
- A significant concern for any Proof-of-Stake network is the concentration of delegations with just a few validators. Monitoring the voting power of the top validators in comparison to the whole network is therefore crucial. Low commission rates can quickly concentrate a lot of delegation power – not only is this important for 51% attacks, but also for governance, which requires a 30% quorum. Terra has, therefore, made it a high priority to promote new validators and those with little delegation. The result is that the concentration of the top 10% and the top 20% of all validators has continuously declined over the last six months.
- An active and engaged validator community is crucial for the security of a PoS network and for building out the necessary tooling infrastructure. Terra has supported these efforts with a few grants. Here are a few examples:
- Due to the immense activity on the Terra network, it is very challenging to synchronize a new validator. An archival node for Terra requires almost 1 TB of data already. ChainLayer has built Quicksync, a tool to download the latest snapshots to solve this problem.
- To monitor the purchases happening via Terra and specifically the Chai wallet, DSRV Labs has built ChaiScan, an explorer for anyone interested to dive deeper into merchant-specific data.
- Infura is an incredibly important tool for any Ethereum developer, and Figment is building something equivalent for Terra, DataHub.
- Monitoring delegations and large fund movements can be a crucial tool; DSRV Labs has built LunaWhale to do precisely that.
We collected 22,724 effective responses during the course of the survey. The main takeaways from the survey are listed below.
- Most respondents held altcoins (83% in total). Among these altcoin holders, 27% of them were altcoin maximalists (only hold altcoins) and 73% held both Bitcoin and alts;
- “Decentralized Finance” (59%) and “Payment” (54%) were utilities that respondents were most interested in. It seems that the recent growth in DeFi has raised people’s awareness and interest;
- The three most popular altcoins were Ethereum (ETH), Crypto.com Coin (CRO) and Ripple (XRP);
- 66% of respondents recently bought altcoins and only 2% believed that it is time to sell. The demand for altcoins (and crypto in general) is very strong at the moment;
- Respondents mainly held altcoins for long-term price appreciation (66%) and staking rewards / to earn interest (55%);
- 44% of respondents believed that we are already in alt-season, 27% said “soon”;
- 63% of respondents believed that altcoins will eventually overtake Bitcoin in market cap. On the contrary, only 19% answered “No, never”. Overall, our respondents seemed to favor altcoins over Bitcoin.