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The Web3 Ecosystem on Terra
The Web 3.0 Idea Has Taken The World By Storm
Web3.0 is a term that has become highly prominent in 2021, but as so many hyped buzzwords in recent years, its definition is relatively broad, and a lot of projects are quick to jump on the hype train. Let’s, therefore, quickly elaborate together on what the term Web 3.0 stands for.
Initially coined by Ethereum and Polkadot co-founder Gavin Wood a few years ago, it refers to a logical evolution of the Web 1.0, which was mainly a network “for passive consumers” and the Web 2.0, where everybody can create various forms of content and which gave birth to social networks. Web 3.0 instead focuses on decentralisation and peer-to-peer technologies like the blockchain — some of the characteristics of the early internet which got lost in the times of the Web 2.0, which today is mainly dominated by a small group of organisations (Big Tech). This development — the goal to eliminate the big middlemen on the internet — is a logical consequence of growing scepticism towards the dominant players in this space like Google and Facebook.
In a Web 3.0 world, people control their data, and they also operate it themselves and sometimes even get rewarded by contributing to or participating in it. All this is enabled by the underlying blockchain technology, which allows users to have actual ownership of their data, transact native internet money in a decentralised way and cooperate via decentralised autonomous organisations (DAOs).
Of course, there is more to Web 3.0, as it also includes other characteristics like the “Semantic Web” (allowing machines to decode meaning and emotions), the use of Artificial Intelligence. Still, in this article, we continue to focus on decentralisation and actual ownership.
Three Important Web3.0 Trends
Let’s look at three core use cases in Web 3.0 that all have seen massive traction over the last few months: Decentralised Finance (DeFi), Non-Fungible Tokens (NFTs), and the “Metaverse” & Blockchain Gaming (GameFi).
DeFi — Being In Charge Of Your Money
Decentralised Finance — DeFi for short — has grown from a wild experiment into a powerful force, standing in for a more transparent and accessible financial ecosystem. The mainstream financial media recognised this and so Decentralised Finance made the covers of both The Economist and Forbes in 2021.
DeFi follows exactly the Web 3.0 vision that we highlighted above and utilises both the internet and the blockchain as underlying technologies to allow people to make their own financial decisions without the need for an intermediary like a bank or asset manager. Relevant use cases are the decentralised trading of cryptocurrencies or synthetic tangible world assets, borrowing and lending, fixed interest and more complex financial instruments such as derivatives. Meanwhile, almost every financial instrument in the traditional world has been replicated in DeFi, and many new, unique concepts have seen the light of the day, such as flash loans.
First the NFT Hype, Now The Metaverse
If you have not heard about NFTs (nun-fungible tokens) in 2021, you have probably been sleeping under a rock. Although NFTs can have various use cases, their usage in reflecting ownership of digital art or in-game items has seen the most traction. Until today, NFTs worth nearly US$20 billion have been transacted in 2021 (mainly on the NFT marketplace OpenSea). Although already created in 2017, NFTs only started to receive attention since the beginning of this year, with volumes exploding in the second half of 2021. The most prominent examples today are avatar projects like Cryptopunks or Bored Ape Yacht Club and unique art pieces from artists like Beetle or Trevor Jones.
In late 2021, the NFT hype evolved into a hype of the entire “Metaverse” (where NFT and avatars play a significant role too), fuelled by Facebook renaming Meta and the company’s decision to double down on its plans to focus on virtual reality.
Play-To-Earn & GameFi- The Next Revolution In Gaming
NFTs have not only disrupted the art market but they are also making big waves in gaming. Following the example of the incredibly successful Play-to-Earn game Axie Infinity, countless crypto- and NFT-based games have been launched or are currently being produced.
NFTs also allow players to truly own their in-game items and buy and sell them in the open market. In the past, this has often only been possible directly in the games, based on in-game currencies that could not be redeemed for real money. Now players can sell their hard-earned items for cryptocurrencies (which can then be exchanged for FIAT money) and sometimes even make a living out of it.
But the fusion of gaming and money has also given birth to another development, often referred to as “gamified finance” or GameFi. Many DeFi applications are “gamifying” their experience by boosting specific metrics based on the ownership of certain NFTs or allowing people to compete with other investors on a global level.
In some cases, both concepts are merged and it can be difficult to know whether you are playing a game or using an investment platform.
Terra — A Now Major Smart Contract Platform
What does this all have to do with the Terra blockchain, you might ask? Well, Terra — which launched in 2018 — has seen significant growth in 2020 and 2021, not only as a smart contract platform and a blockchain that features native, decentralised stablecoins like UST but also as the breeding ground for many Web 3.0 projects.
Today, Terra is already the number 2 blockchain when it comes to the metric “Total Value Locked” in DeFi protocols (US$16.82 billion), only behind Ethereum (US$144.82 billion) and in front of Binance Smart Chain, Solana and Avalanche.
This impressive growth has mainly been driven by the adoption of Terra’s native stablecoin UST (which is currently the number 4 stablecoin in terms of market capitalisation) and DeFi protocols like Anchor (stable savings rate and borrowing) and Mirror (synthetic assets).
But the popularity of Terra has not stopped with DeFi protocols being built on top of it (there are currently more than 100 in the making) but its success has quickly spilled over to the NFT /Metaverse sector and blockchain gaming.
Web 3.0 Examples on the Terra Blockchain
Now let’s have a look at some of the most prominent examples based on Web 3.0 categories that we explored above.
DeFi on Terra
Anchor — A Stable Savings Rate Across DeFi
Anchor Protocol aims to be the “gold standard for passive income” by establishing a stable savings rate across the typically highly volatile crypto and DeFi universe utilising Proof-of-Stake block rewards. The protocol launched in mid-March 2021 with an initial working feature-set that allows users to earn up to 20% APY on their UST (the native Terra USD-pegged stablecoin) and to collateralise $LUNA as well as $ETH (and soon $SOL and $DOT) to borrow UST incentivised by the distribution of the ANC governance token. The protocol achieved more than US$8 billion in total value locked (TVL), making it one of the most important protocols in the entire crypto space. Right now, the Anchor savings rate is being integrated into multiple retail-facing savings and payment applications around the world.
Link: Anchor
Apollo — A Yield Management Platform Built by DeFi Users for DeFi Users
Apollo DAO is a yield optimiser on the Terra blockchain, aggregating yield from multiple strategies, starting with Mirror Protocol’s liquidity pools. But despite many existing yield aggregators in DeFi, Apollo also spearheaded a new unique concept called the “Warchest.”
Apollo’s Warchest is a capital pool powered by the protocol’s revenues and managed by Apollo token holders. It’s comparable to a hedge fund which is run in a decentralised way directly by its investors.
Link: Apollo DAO
NFTs and the Metaverse on Terra
Randomearth — A Decentralised Marketplace for NFTs
Based on the ongoing evolution and growth of the Metaverse market, NFTs play an increasingly important role in the ecosystem. Randomearth tries to solve some of the existing bottlenecks and problems by bringing decentralised limit order books to Terra and allowing users to trade anything from $UST to NFTs like Galactic Punks or Derby Star’s horses.
Randomearth supports various existing and upcoming NFT projects and also encourages them to build on their infrastructure, providing unique features like fractional NFTs, unsecured bids, arbitrary auctions of assets, and many more.
Link: Welcome — Random Earth
Lunaverse — A Virtual World Built on the Terra Blockchain
Lunaverse is a virtual world built on the Terra blockchain, combining realistic 3D city models and NFT properties that are linked to yield-bearing deposits on existing DeFi protocols.
Replicating parts of the existing world — starting with seven square miles in San Francisco — Lunaverse is housing three different kinds of NFTs: buildings, partners and people. When purchased, the proceeds from the NFT sale(s) are invested in DeFi protocols such as Anchor to generate yield and power the Lunaverse economy.
Also here, we just selected just two examples from an endless list of promising NFT and Metaverse plays that exist on Terra.
Play-to-Earn & GameFi on Terra
Derby Stars — Who Owns the Fastest Horse?
Derby Stars is the first NFT-based gaming experience live on the Terra blockchain. The gameplay is centred around players competing against each other in horse races. To win, it’s essential to either acquire or breed a competitive horse whose characteristics and racing records are stored permanently on the Terra blockchain.
Players — represented by their custom avatar — can own horses and land, becoming a rancher which allows them to reap various rewards.
Link: Derby Stars
StarTerra — Three Factions Fighting for Public Sale Allocations
At first glance, StarTerra looks like one of the dozens of launchpads that help new projects raise money from crypto investors. But it differentiates itself heavily by providing a gamified experience with an extensive background story.
StarTerra features three competing factions that fight for supremacy relying on the participating users’ funds and social media activity. Winning factions can secure a higher percentage of available public sale allocations on the launchpad. Additionally, players can equip themselves with powerful NFT items which further enhances their experience and offers more significant rewards.
Link: StarTerra — The First Gamified Launchpad for Terra
XDEFI Wallet Is Supporting the Terra Ecosystem
XDEFI Wallet is a strong proponent of a cross-chain Web 3.0 ecosystem. We identified Terra as one of the strongest contenders in the smart contract space. We added it as one of the first blockchains to our multi-chain wallet that now supports Ethereum, Polygon, BSC, Bitcoin, Bitcoin Cash, Litecoin, THORChain and Terra.
We want to offer users a superior experience compared to existing Web 3.0 wallets and enable them to manage digital assets and NFTs on multiple chains and even transact them across chains as efficiently as possible.
XDEFI Wallet already supports all Terra projects by default if the user chooses to prioritise XDEFI in the settings (compared to Terra Station Wallet). We are reaching out to all existing and upcoming Terra projects to add additional features and to include XDEFI Wallet as a selection in their user interface.
Advantages of Using XDEFI Wallet on Terra:
We are confident that XDEFI offers many advantages compared to existing solutions and we are working tirelessly to add even more features and improvements.
View and Manage Your NFTs
With XDEFI Wallet you can view and manage all your NFTs on Terra directly in the wallet be it GalacticPunks, Lunabulls or Levana’s Dragon Eggs.
Earn Yield On Your UST via Anchor with One Click
We have integrated Anchor’s Earn product directly into our wallet, so that users can easily leverage Anchor’s high yield for their UST savings.
Manage Multiple Accounts
With XDEFI Wallet, users can have more than one account and switch between those accounts with the click of a button.
Calling All Protocols Building on Terra
If you are working on a project on Terra or are already live, please reach out to us to discuss the integration of XDEFI Wallet; it will only take around 10 minutes of your time and will considerably improve your project’s user experience.
We are also currently working on an incentive program to make sure it is worth your while, and we are happy to discuss this further with you!
Disclaimer
The information included in this article is accurate as at the date of this article.
None of the information contained within this article constitutes, or should be relied on as, financial or investment advice or a suggestion, offer, or other solicitation to engage in or refrain from engaging in, any purchase, sale or any other investment-related activity with respect to any cryptocurrencies or any other transaction.
This article is not advising you what to do with your money or cryptocurrencies, it is instead solely demonstrating how we support the Terra ecosystem and how we have integrated certain features including the “Anchor Earn” feature within XDEFI Wallet. If you have any queries in relation to Anchor Earn or the Terra ecosystem then please contact Terra directly.
Before deciding whether to purchase any cryptocurrencies, to carry out any staking or farming activities or to provide liquidity to any liquidity pools, please carry out your own detailed research and due diligence and ensure that you are fully aware of all the risks involved including the concept of impermanent loss.
XDEFI Wallet makes no representations, warranties, or assurances as to the accuracy, currency or completeness of any content contained in this article or any sites linked to this article.
