TerraUSD (UST) stablecoin recently surpassed Binance USD in market capitalization, making it the third-largest stablecoin. The total market value of the token is now $17.50 billion, slightly higher than the $17.46 billion of BUSD.

However, actual trading in UST appeared to lag behind its peers, with 24-hour volumes totaling $261 million, ranking fifth among major stablecoins. According to Coinmarketcap, the token’s volumes were a fraction of those seen by larger peers USDT and USDC, and even lagged those of smaller peers BUSD and DAI.

The volumes suggest that the increasing market capitalization of UST is due to its reserves and token circulation rather than actual demand for the token. The Anchor Protocol, Terra’s largest DeFi platform, currently controls nearly two-thirds of UST supply through staking and deposits.

The Luna Foundation Guard (LFG) of the Terra community has been steadily increasing the reserves that support UST. One important aspect of this is the use of LUNA tokens to mint UST. Because UST has a fixed 1:1 peg to the dollar, the creation of more tokens has no direct impact on its price.

Rather than the usual deflationary effects of creating new tokens, minting new UST tends to increase the token’s market capitalization.

According to Terra Analytics, total UST supply increased by about 800 million tokens over the last week, corresponding to a $800 million increase in market capital. LUNA’s burn rate was also consistent during that time, with the exception of the release of 10 million tokens from non-circulating supply.

Despite constant minting, the data shows that Terra founder Do Kwon’s goal of making UST the most widely used stablecoin is still a long way off. Constant efforts by the LFG to replenish reserves have also put some downward pressure on LUNA, which fell 14% last week.

Concerns have also been raised about the protocol’s long-term viability, particularly given its market-beating yield of 20%. A surge in deposits has weighed on its reserves, potentially resulting in a severe liquidity crunch, destabilizing the UST’s peg.

However, the ANC has taken precautions against such a scenario, most recently voting in favor of dynamic yields. To increase its liquidity, the protocol has added support for other blockchains.