Col-5 is coming to Terra (LUNA) and the community is bullish, but what is it?

CryptoSlate

The growing awareness for Terra’s native token LUNA has been largely driven by broadcasts surrounding the network’s pivotal upgrade, Columbus-5 initially planned for September 9.

The Terra team has recently announced that the Columbus-5 mainnet deployment will be delayed for roughly three weeks while reassuring the impatient community there is “no reason to fret.”

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Why the buzz

The major upgrade will activate the Inter Blockchain Communication protocol to communicate with Cosmos and other blockchains.

But while cross-chain bridges will allow Terra to export its stablecoins to other platforms, rapidly expanding their use case, the native token will also profit in several ways.

LUNA swapped for Terra’s native stablecoin TerraUSD (UST) will be burned, as opposed to sent to a community pool as it is currently, which will, in theory, add downward pressure on its supply, while boosting its price.

In addition, like crypto researcher Westie, who focuses on the Terra ecosystem, pointed out on Twitter, after the launch of Columbus-5, the swap fees will be given to LUNA stakers and those are expected to grow. 

As UST adoption grows and more LUNA burns, its value will increase, and staking rewards will scale with it, making it extremely attractive for people to get their LUNA staked.

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Demand for Terra’s stablecoins, such as UST, is driven by the utility and usage of products in Terra’s ecosystem, but with more than 60 applications set to launch after the Columbus-5 upgrade, UST adoption could explode.

Many of these newcomers to the ecosystem could turn out to be game-changers.

Mars Protocol, Terra’s first money market will feature uncollateralized borrowing. Nexus Protocol will bring in LTV protection for Terra’s high-yield savings protocol Anchor and the synthetic asset trading protocol Mirror. Protocol Talis is set to kick off an NFT marketplace on Terra and finally, Ozone, an insurance mutual protocol, will enable levered coverage of technical failure risks, making the entire ecosystem more secure.

Why the delay

Earlier today, the Terra team announced on Twitter that the Columbus-5 mainnet deployment will be delayed until the end of the month.

“No need to fret, as the goal is to implement some extra precautionary measures for the rollout of Terra’s most significant mainnet upgrade yet to ensure the smoothest launch possible,” read the announcement.

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The team added that the downtime is going to be used to ensure compatibility between Columbus-4 and Columbus-5, while providing “more breathing room for third-party projects building on Terra with dependencies on existing apps like Mirror, Anchor, TerraSwap, and Shuttle” that all need to migrate. 

Finally, during the delay, the team said it will “provide more thorough and expansive documentation for the community and third-party developers on the specifics of the Col-5 upgrade and how to use it properly.” 

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Author: Ana Grabundzija


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