The decentralized finance (DeFi) landscape continues to evolve at a rapid pace, and one of the latest developments comes from Cream Finance, a leading lending and borrowing protocol built on Ethereum. As of March 3, 2025, the platform has officially integrated UST (TerraUSD) into its Ethereum-based ecosystem, allowing users to supply and borrow this popular algorithmic stablecoin through app.cream.finance.
This move follows the successful governance vote approving C.R.E.A.M. Proposal #28, which paved the way for UST’s listing. While users can now deposit and earn interest on UST, there is an important limitation: the collateral factor for UST is currently set at 0%. This means that although you can lend UST and potentially borrow other assets against different collateral, you cannot yet use UST itself as collateral to secure loans.
This cautious approach reflects standard risk management practices in DeFi, where new asset integrations are often rolled out with conservative parameters before being gradually increased based on market stability and demand.
Why UST Integration Matters
UST, developed by the Terra ecosystem, has become one of the most widely used algorithmic stablecoins in DeFi due to its seamless integration across various protocols and its mechanism for maintaining price parity with the US dollar.
By adding UST support, Cream Finance enhances its appeal to liquidity providers and borrowers who rely on stablecoins for yield generation, hedging, or leveraged positions.
👉 Discover how integrating stablecoins like UST can unlock new DeFi opportunities
Core Keywords:
- Cream Finance
- UST
- Ethereum DeFi
- lending platform
- decentralized finance
- stablecoin integration
- collateral factor
- governance proposal
The addition of UST expands Cream Finance’s growing portfolio of supported assets, reinforcing its position as a versatile player in the Ethereum DeFi space. Users now have more options when optimizing their capital efficiency within the protocol.
How to Use UST on Cream Finance
Using UST on Cream Finance is straightforward:
- Visit app.cream.finance
- Connect your Web3 wallet (e.g., MetaMask)
- Navigate to the Markets section
- Find UST in the list of available assets
- Supply UST to start earning interest
- Borrow other supported assets using existing collateral
Note: Since the collateral factor is 0%, supplying UST will not increase your borrowing power until governance adjusts the parameter.
Interest rates for both supply and borrow are determined algorithmically based on real-time utilization rates—ensuring dynamic and market-responsive yields.
Risk Considerations and Governance Role
In DeFi, every new asset listing introduces potential risks, including smart contract vulnerabilities, price volatility (even among stablecoins), and oracle manipulation. That’s why decentralized protocols like Cream Finance rely heavily on community-driven governance to manage these risks responsibly.
Setting the initial collateral factor at 0% allows the network to monitor UST’s performance under live conditions while protecting the system from over-leveraging. Future proposals may increase this factor if sufficient demand and security assessments support such a change.
Governance participants are encouraged to stay active in discussions and voting processes to help shape the platform’s evolution.
Frequently Asked Questions (FAQ)
Q: Can I use UST as collateral to borrow other assets?
A: Not yet. The current collateral factor for UST is 0%, meaning it cannot be used as collateral until a future governance vote approves an increase.
Q: Is there a risk of UST de-pegging affecting my funds?
A: While UST aims to maintain a 1:1 peg with the US dollar, all algorithmic stablecoins carry some risk of de-pegging during extreme market stress. Always assess the stability of any asset before depositing.
Q: How are interest rates determined for UST?
A: Interest rates are dynamically adjusted based on supply and demand within the Cream Finance protocol. Higher borrowing demand increases rates for lenders.
Q: Do I need to complete KYC to use Cream Finance?
A: No. Cream Finance is a non-custodial, permissionless protocol. You only need a compatible wallet to interact with the platform.
Q: Are there plans to support UST on other chains within Cream Finance?
A: Cream Finance operates across multiple blockchains via its forked versions (e.g., on Fantom, Polygon). Expansion of UST support beyond Ethereum would depend on separate governance decisions per chain.
👉 Explore cross-chain DeFi strategies that maximize asset utility
The Broader DeFi Context
Cream Finance’s decision to integrate UST aligns with a broader trend in DeFi—interoperability between major ecosystems. Terra’s growing footprint across lending platforms, DEXs, and yield aggregators underscores the importance of seamless asset availability.
Moreover, with increasing regulatory scrutiny on centralized stablecoins like USDT and USDC, algorithmic alternatives such as UST offer a decentralized alternative that resonates with core DeFi principles.
However, sustainability remains a key topic of discussion. The long-term success of algorithmic stablecoins depends on robust mechanisms, transparent reserves (where applicable), and strong user adoption—all factors that continue to be tested in volatile markets.
Looking Ahead
The launch of UST on Cream Finance marks a strategic step toward greater asset diversity and user choice. As the protocol matures, expect more frequent governance proposals aimed at refining risk parameters, expanding cross-chain functionality, and enhancing user experience.
Community engagement will remain crucial. Whether you're a liquidity provider, borrower, or governance voter, your participation helps ensure the platform evolves securely and sustainably.
For developers and analysts monitoring DeFi trends, this integration serves as a case study in how protocols balance innovation with risk mitigation—a delicate but necessary equilibrium in decentralized finance.
👉 Stay ahead of DeFi innovations by exploring next-gen financial protocols
Final Thoughts
The addition of UST to Cream Finance’s Ethereum platform reflects the ongoing maturation of DeFi infrastructure. With careful parameter settings and community oversight, platforms like Cream Finance are building resilient systems capable of supporting diverse digital assets.
As users gain access to more financial tools without intermediaries, the promise of open, transparent, and globally accessible finance inches closer to reality.
Whether you're depositing your first stablecoin or managing complex leveraged positions, understanding how assets like UST function within lending protocols is essential for navigating today’s DeFi landscape safely and effectively.