Rift has created a novel form of protocol-owned liquidity that empowers DAOs to achieve sustainable liquidity in a single transaction, without needing to give up ownership of their governance tokens. We partnered with Terra during our capped $50M TVL private beta to support liquidity for LUNA on Ethereum. With Rift, Terra was able to begin controlling 28% of the LUNA:ETH liquidity on Uniswap in a single transaction.
Terra Deepens Liquidity for $LUNA Using Rift
Terra is one of the largest and most impressive communities in the Web3 ecosystem. Fundamental to any Web3 community is the opportunity to join and share in that community’s growth by purchasing the DAO’s governance token. In Terra’s case, this is the $LUNA token. By using Rift, the Terra community was able to ensure that the $LUNA token had deep sustainable liquidity.
Liquidity is essential for governance tokens; it is what allows people to join communities at a fair price. With poor liquidity, these communities cannot grow. Many DAOs currently rely on methods that hinder long-term growth. DAOs now have an alternative solution to attain liquidity that actually supports long-term growth by using Rift.
Liquidity of $LUNA is not only essential for ensuring that new community members can join at a fair price, but it is also a crucial component of how Terra’s stablecoin $UST achieves stability. These two factors combined make it even more important that $LUNA has consistently deep liquidity. This is why Terra has decided to use Rift’s innovative solution to ensure stable long-term growth.
Listen to the Terra x Rift AMA
Rift is a decentralized protocol that empowers DAOs with a novel form of protocol-owned liquidity that allows them to rapidly shift to sustainable token liquidity without having to give up any ownership of their governance tokens.
Today’s liquidity structures are parasitic to DAOs; they drain DAO treasuries and shrink market caps. Rift allows DAOs to deploy governance tokens from their treasuries to deepen token liquidity without having to give up ownership. The protocol pairs these governance tokens with $ETH from liquidity providers. By working together, DAOs receive the liquidity they seek and $ETH depositors receive natively high and well-diversified yield. As a result, both parties are able to achieve their goals through redefined incentive structures. DAOs across several leading Layer 1 blockchains, including Ethereum, Terra, Fantom, and Injective, utilize Rift to unlock sustainable liquidity.
Terra is an application-specific blockchain built on the Cosmos SDK and Tendermint consensus. The Terra protocol is the leading decentralized and open-source public blockchain protocol for algorithmic stablecoins like UST built off of the Cosmos SDK and secured by a system of verification called Tendermint Consensus. Using a combination of open market arbitrage incentives and decentralized Oracle voting, the Terra protocol creates stablecoins that consistently track the price of any fiat currency. Users can spend, save, trade, or exchange Terra stablecoins instantly, all on the Terra blockchain. LUNA, the native Terra cryptocurrency that absorbs the demand fluctuations of UST, provides its holders with staking rewards and governance power. The Terra ecosystem is a quickly expanding network of decentralized applications, creating a stable demand for Terra’s stablecoins and increasing the price of LUNA.