Terra Ecosystem Markets Launch on Injective

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Injective

6 min readDec 16, 2021

Decentralized Terra ecosystem markets are now on Injective!

Users can begin to trade native Terra (LUNA) spot and derivatives markets using TerraUSD (UST). The Terra community is also launching campaigns to incentivize UST adoption on Injective, starting with a $200,000 trading competition this week.

The integration of the Terra with Injective marks a groundbreaking event for cross-chain IBC transactions. This article will provide background on the collaboration with Terra, integrating Terra assets, and the launch of new Terra focused markets on Injective.

Welcome to a new era of cross-chain derivatives trading on Injective.

Background

There has been a significant push from the Terra community to bring LUNA and UST to Injective since the launch of the mainnet last month. In many ways, the UST focused markets would be a logical addition to the Injective exchange.

The current markets on Injective are mainly denominated in USDT. Although USDT is liquid, it is quite centralized which in many ways goes against the decentralization ethos of Injective. However, TerraUSD (UST) is a decentralized algorithmic stable asset. On top of this, Terra also enabled IBC after the recent Columbus-5 upgrade which made it a perfect fit for the IBC-enabled Injective Chain.

All of this culminated in an Injective governance proposal created by a Terraform Labs member last week. Injective Improvement Proposal #83 (IIP-83) sought to list native LUNA/UST Spot, UST/USDT Spot and LUNA/UST Perpetual Pairs. The Terraform Labs member, who goes by the moniker “The Intern,” wrote a long-form post on the Injective governance discussion forum to explain why the addition of native Terra assets would bring a multitude of benefits for the Injective community.

Key Objectives of Injective Improvement Proposal (IIP-83) include the following:

Providing a decentralized and censorship-resistant stablecoin for the Injective derivatives DEX, presenting a significant advantage as a true DEX with liquidity not tethered to stablecoins with custodial risk.
Granting native exposure to the first decentralized LUNA/UST perpetual market.
Enabling native IBC transfers between Terra and Injective — unlocking numerous future collaborative, composable, and yield farming opportunities between both builders and users.
Broadening exposure, engagement, and liquidity to Injective from Terra ecosystem partners, projects, community, and UST market makers + arbitrageurs.
Making Injective a hub of UST liquidity on Cosmos.

Integrating Terra Assets on Injective

The integration process began with the setup of an IBC relayer between Injective and Terra. Effectively this would serve as a communication channel from the Injective Chain to the Terra blockchain. The first intended use case for this channel would be the transfer of assets between Terra and Injective.

After the Terra IBC relayer integration and testing was completed on the protocol level, it came time to make the entire bridging process more user friendly. To do this, Terra Station was integrated with the Injective Bridge since the majority of the Terra community uses the Terra Station wallet to hold their assets. The Injective Bridge is also the first to launch native IBC transfer support directly from the Terra Station extension. Cosmos native users can also utilize the Kelpr wallet on the Injective Bridge for transferring LUNA and UST if they choose to do so.

The Injective Bridge with the Terra connection went live last week, allowing users to seamlessly bridge assets with sub $0.40 fees and fast transaction times. A live demo of LUNA transfers on the Injective Bridge can be viewed here.

*Injective Bridge: On-Chain Terra transfers*

Injective: A New Hub for Terra and UST Markets

The first decentralized Terra markets on Injective will focus on LUNA and UST. In particular, LUNA/UST spot markets have been listed alongside a LUNA/UST perpetual contract.

In order to ease the transition of users from USDT to UST, IIP-83 also released a UST/USDT spot market. Basically, anyone can now take their USDT on Injective and easily convert it to UST for zero gas fees!

UST is the leading stablecoin on Terra, currently ranked 5th among stablecoins by market cap. Perhaps more importantly, UST is decentralized and does not have custodial risks that are typically present with other stable assets.

“We’re thrilled to once again partner with the Injective team to launch the first LUNA/UST perpetual swaps in the Cosmos, with UST well-equipped to serve as the decentralized quote currency on the exchange, says Do Kwon, Co-Founder and CEO of Terraform Labs (TFL).

Since UST is now an official quote currency on Injective, users can also begin to create new spot and perpetual markets using UST. In turn, the broader crypto community can lead Injective into becoming a hub for UST liquidity and exchange.

In order to further incentivize LUNA and UST trading on Injective, the Terra community has designed unique liquidity campaigns. The first one will consist of a Deposit & Trade competition via which users can share a $200,000 UST for depositing UST and trading on Injective. The competition will be released later this week with complete details.

New Terra Tokens on Injective

The Terra community can also create new decentralized perpetuals stemming from other Terra ecosystem projects such as Anchor Protocol. This would provide new financial primitives for these native Terra assets within the broader crypto community since decentralized perpetuals are only found on Injective as of now.

“Crypto has officially entered a new age in which cross-chain interoperability has become a paramount focus for everyone. The launch of Terra markets on Injective is a step towards making DeFi and Web3 more accessible for everyone as users now have the ability to seamlessly bridge assets and take part in fully decentralized trading. I am certain that the experimentation from both ecosystems will continue and propel the entire industry to new heights,” said Eric Chen, Injective Labs Co-Founder and CEO.

New Terra ecosystem projects can also rapidly list decentralized spot markets on Injective. This would provide the first orderbook exchange trading avenue for many Terra projects globally. In addition, community members can also begin to create more sophisticated decentralized markets such as an index product focused solely on a basket of Terra ecosystem assets. A tab has been created on Injective Pro so users can easily view Terra markets.

Here is a quick Guide on how to trade with UST on Injective.

Injective Pro: https://injective.exchange/

Closing Remarks

It’s amazing to see the progress made by the Terra and Injective communities to further democratize opportunities within the world of finance.

The launch of Terra markets on Injective paves the way for new forms of interoperability and cross-chain trading to emerge. Terra assets can seamlessly be bridged over to Injective and new Terra projects can launch their tokens on Injective for fast orderbook trading. As the growth continues, Injective can be poised to become a new decentralized hub of UST liquidity and Terra ecosystem markets.

About Terra

Terra is an application-specific blockchain built on the Cosmos SDK and Tendermint consensus. The Terra protocol deploys a suite of algorithmic, fiat-pegged stablecoins underpinning a thriving DeFi ecosystem like Anchor, CHAI, and Mirror Protocol. LUNA, the native staking and governance asset of Terra, absorbs the short-term volatility of Terra’s stablecoins, with Terra’s stablecoin (e.g., UST) demand a function of demand for Terra’s DeFi ecosystem — accruing value to LUNA via seigniorage.

About Injective

Injective is a custom interoperable layer one protocol for building powerful exchange, DeFi, derivatives & Web3 applications. Injective was created using the Cosmos SDK and is able to achieve instant transaction finality while sustaining lightning fast speeds. INJ is the native deflationary scarce asset that powers the Injective Protocol and its rapidly growing ecosystem. Injective is incubated by Binance and is backed by Pantera Capital.