In a new report, CryptoCompare says that Ethereum is experiencing slow growth in locked total value (TVL). TVL stands for the amount of all staked crypto assets generating interest and other rewards. The crypto market data provider says strong competition from Ethereum's competitors is one of the reasons behind the slowdown in ETH's growth.
“Ethereum has maintained its dominance despite sluggish growth with the current $150 billion TVL. This rate is down 20.8 percent from Q4 2021. This recession can be attributed in part to the poor performance of cryptocurrencies during the quarter, as well as fierce competition among alternative layer1 protocols. "
CryptoCompare says that blockchain protocol Terra (LUNA), which is mainly focused on hosting algorithmic stablecoins, recorded greater growth than Ethereum in the first quarter of 2022.
According to CryptoCompare's report, Terra has had the most successful fight against Ethereum in the past three months, raising $35.2 billion with a TVL growth of more than 72.0 percent.
Leading Ethereum competitors Solana (SOL), LUNA and Avalanche (AVAX) are also closely following ETH. According to the cryptocurrency data provider, the growth in Terra's TVL can be attributed to the attractive returns of fixed income platform Anchor Protocol.
Staking Terra's stablecoin UST on Anchor Protocol currently yields a 19.46 percent annual return. Terra, which is in the eighth place in terms of market value, is currently trading at $ 93.02.
Terra (LUNA) invested in this altcoin project
The Luna Foundation Guard (LFG), a nonprofit organization that is creating reserves to support the dollar-pegged stablecoin UST in the Terra (LUNA) ecosystem, recently announced that it has purchased Avalance (AVAX) for $100 million.
Altcoin AVAX rose 7% to $89 after this development. This development makes Avalanche (AVAX) the first major cryptocurrency beyond Bitcoin to be added to the UST reserve. Singapore-based Luna Foundation Guard has pledged to purchase $10 billion worth of Bitcoin (BTC) as UST reserves. The company has already purchased $1.7 billion worth of BTC. The Avalanche (AVAX) acquisition comes as a major portfolio diversification strategy for Terra. Do Kwon, founder of Terraform Labs, said that Luna Foundation Guard chose Avalanche as its UST reserve because of its rapid growth and wider fan base. Altcoin AVAX has been performing well this year.