Avalanche and Terra have recently started collaborating on many fronts. The most recent collaboration was LFG adding AVAX as a backing reserve for UST. Terra and LFG both decided to buy $100M of AVAX each which means that the Avalanche foundation now holds $100M worth of UST and $100M worth of LUNA at the time of the deal.
A few weeks before this announcement, Avalanche became the first outpost for native-Anchor Protocol expansion to other chains. Users on Avalanche could now deposit UST (Wormhole) directly into Anchor protocol to earn the famous ~20% APY without having to bridge to Terra or use Terra wallets.
# Methodology
The partnership between these two blockchains seems to just be starting with likely many more collaborations planned.
Therefore, I wanted to see how much UST has been traveling back and forth between these chains using the Wormhole bridge.
# Observation
Daily Trends
The number of daily transactions and users have both seen a large increase recently. Compared to January levels, transactions and users increased by 2x in March and 3x in April. The largest increase was driven by UST leaving Terra.
The launch of Anchor on Avalanche in mid-March kicked off a massive increase in amount transferred. The daily UST transferred increased from less than 1M to a range of 5–10M transferred daily.
In April, most of the transferred volume has been driven by UST entering Terra.
Cumulative trends
Looking at the cumulative trends, we can see that number of sending transactions are about 2x the number of receiving transactions.
On the amount front, we’ve seen a decoupling of total UST amount sent vs received in mid-March. Since then the total UST sent to Avalanche has increased to 200M while the total UST received is almost 2.5x less at 75M.
# Conclusion
This is just the beginning of Terra and Avalanche partnership and we’re already seeing a good chunk of UST traveling to Avalanche. The future is bright for both these chains as they try to take TVL away from Ethereum.
