It's no secret that it has been tough sledding for crypto investors as of late, with most major cryptocurrencies in the red year to date. But just like in the traditional equity markets, periods of turbulence can be a good time to pick up some quality names at discounts to where they were just a short time ago. Despite the market sell-off, these names all have plenty of positive developments underway and catalysts ahead.
One such blue chip is Terra (LUNC -0.40%). Excitement about the burgeoning Terra ecosystem propelled LUNA to an all-time high of $119.22 just a few weeks ago. Terra is down about 30% from that high-water mark. Despite this drawdown, little has changed that should dim Terra's long-term prospects. Terra's stablecoin, TerraUSD (USTC) is still in high demand and now has a market cap of $18.5 billion. Founder Do Kwon is still acquiring more Bitcoin (BTC 0.76%) for Terra's reserves on his way to building up a $10 billion Bitcoin war chest, and investors are still parking their TerraUSD in Terra's Anchor Protocol to earn 20% annual percentage yields (APY) . Furthermore, there is $29 billion of total value locked in Terra, which is more than its current market cap of $28 billion. There will be plenty of volatility ahead, but Terra looks like the type of investment crypto investors want to buy and hold for the long term.
Speaking of stablecoins, TRON (TRX 0.54%) is hoping to emulate Terra's success with the launch of its own high-yielding stablecoin, USDD, which was introduced on May 5th and is available on Tron, Ethereum, and the Binance Smart Chain. TRON has been one of the few cryptocurrencies to enjoy a gain over the past week, posting a 6% increase for the week as anticipation built for USDD's launch.
USDD will be algorithmically backed, like TerraUSD. If USDD falls below its peg to $1, traders can exchange 1 USDD for $1 worth of TRON. If the USDD were to rise above $1, traders can exchange $1 worth of TRON for USDD. This mechanism should help maintain USDD's price within a narrow range around $1. The surging popularity of TerraUSD has been instrumental in the rise of the Terra network, so TRON is aiming to attract new investors in the same way. Terra pays 20% interest on TerraUSD held in its Anchor Protocol, while TRON is pushing the envelope and offering 30% interest on USDD. It is unlikely that TRON will leapfrog Terra, but it is likely that this yield will draw more crypto investors into the Tron ecosystem for the first time.
Last but not least, NEAR Protocol (NEAR -0.45%) is also looking to capitalize on the same model with its own stablecoin offering, USN, which will reportedly pay investors up to 20% interest annually. USN launched NEAR Protocol on April 25th, and if it becomes widely adopted, this will be a serious catalyst for NEAR.
NEAR also has substantial firepower behind it from some of crypto's major venture capitalists, such as Tiger Global, Three Arrows Capital, Jump Crypto, and FTX Ventures. In January, NEAR raised $150 million and then followed this up with a $350 million funding round last month. This is funding that NEAR can use to drive development on the network, which should ultimately attract more users.
What could this development look like? NEAR is building an ecosystem that already includes decentralized exchanges (DEXs) like Ref Finance, non-fungible token (NFT) platforms like Parasand Mintbase, and lending protocol Burrow. Although the price of NEAR is down over the past week, all of these applications have expanded their user base over the same time frame.
While NEAR is the 19th-largest cryptocurrency by market cap at $8 billion, it is not available on many major U.S. exchanges such as Coinbase and FTX. Since FTX Ventures invested in NEAR's latest funding round, it seems likely that NEAR will list on FTX. This would increase volume and liquidity for NEAR and make it available to a wider base of U.S.-based investors, which can help drive price.
The crypto market has been challenging in 2022, but during times like these, investors can establish positions in projects that are building value at discounted prices before the market heats up again.