The Terra blockchain has completed Columbus-5, a much-anticipated upgrade that should improve the system’s interoperability with other cryptocurrency networks.
The update started at 8:31 UTC on Thursday, following the publishing of block No. 4,724,000, and took about 2 1/2 hours to complete. With the development team declaring the revised chain stable and ready to use. Users had the urge not to transmit transactions on the network or use their wallets during the migration. Because the new version of the software is incompatible with its predecessor.
According to Ryan Watkins, a research analyst at Messari, in the data provider’s newsletter this week, Columbus-5 will enable the development of dozens of applications.
Perhaps more crucially, it promises to make it simple for investors to transfer assets from Terra to a variety of other networks. As well as the other way around. The Terra blockchain’s native asset, LUNA has risen in value in 2021. It is now the 12th-largest cryptocurrency by market capitalization.
IBC on Terra
Terra now can employ the Inter-Blockchain Communication (IBC) standard, which facilitates data interchange among all networks that implement it.
To be clear, IBC adoption is subject to an on-chain governance vote on Terra before manually implementing it on the network. It means it won’t be operational. Unless the community votes to activate it, according to Brian Curran of the Terra team. Terra’s governance votes have a 14-day voting period; thus, if it passes, IBC will go live on Terra shortly after the voting period ends.
IBC integrated into at least ten additional blockchains, the most well-known of which being Cosmos, which develops with interoperability in mind. According to Wen Mainnet, Sir? an upgrade-tracking website, around 13 or so additional networks are working on it.
Terra’s compatibility with other systems will increase much further in the coming weeks, when Wormhole V2, a new bridge protocol, fully integrates into the chain.
According to a blog post published on Aug. 9 by Curran, Wormhole would facilitate the transfer of Terra coins to and from two widely used blockchains: Ethereum and Solana. According to CoinGecko data, the native tokens of these networks, ETH and SOL, rank No. 2, and By market capitalization, it is the seventh most valuable cryptocurrency.
Curran’s cross-chain transfers of UST and other Terra assets to ETH are currently enabled via the Shuttle bridge. On the other hand, Shuttle will be phased out in favor of Wormhole. It allows for more decentralized cross-chain transfers of UST and other Terra assets to Solana and ETH.
Speeding up its potential
Curran believes wormhole V2 is already operational for Solana, ETH, and Terra. Wormhole’s node operators, known as guardians support Terra for V2. However, the front-end interface that allows users to transfer assets in and out of Terra to Solana and Ethereum is not yet available. The Wormhole team is just waiting for Col-5 to be live before delivering V2 UI support for Terra, which should happen within a week.
Taken together, these improvements have significant consequences for TerraUSD (UST). It is a stablecoin based on Terra that maintains its value against the US dollar.
The update has the potential to speed up. According to Kevin Kang, managing principal of BKCoin Capital, a digital assets hedge fund, UST’s expansion will result in it acquiring market dominance in the decentralized stablecoin market. Because it will be able to move cross-chain.
UST may overtake DAI
Watkins of Messari went even farther, predicting that UST, the fifth-largest stablecoin with a market cap of $2.6 billion, may overtake DAI, the fourth-largest stablecoin overall with twice as much in circulation. Do Kwon, co-founder of Terraform Labs, which developed UST and Terra, has claimed that this is his goal. The combination of these upgrades and integrations has the potential to significantly accelerate UST supply growth. Therefore positioning UST for a DAI flip.
Interoperability also means that Terra-based products, such as the Anchor lending system and the Mirror protocol for tokenizing stocks like Tesla and Apple, can now accept coins from other chains as collateral. This is according to Fred Schebesta, the founder of the price comparison site Finder and a crypto investor.
Terra is a force to be reckoned with. It has the ability to adapt both Inter Blockchain Communication and Wormhole v.2.
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