Luna Foundation Purchased Another $1B In BTC To Back Terra

Time Stamp: May 6, 2022 11:37 AM
Source Node: 1295351

The Luna Foundation purchased another $1 billion in BTC to back Terra’s stablecoin according to the announcement from the co-founder Do Kwon as we can see more today in our latest cryptocurrency news.

Do Kwon added:

“For the first time, you’re starting to see a pegged currency that is attempting to observe the bitcoin standard.”

The Luna Foundation purchased another $1 billion in BTC or 37,863 coins which double the Guard’s precious reserves from 42,530 up to 80,394. the group facilitated the purchase by swapping $1 billion in UST stablecoin for BTC with Genesis Trading while completing a $500 million over-the-counter purchase with help from Thee Arrows Capital. The purchase brings Terra’s total reserves to more than $3 billion and the bulk of that in BTC and now holds smaller shares of LUNA, AVAX, USDC, and UST stable coins. The LFG is a foundation established to guide the Terra network development and the ecosystem and its reserve to provide backing for the terra stablecoin which is the third most valuable stablecoin on the market that trails only USDT and USDC while edging out BUSD.

Terra’s Founder Revealed , do kwon, bitcoin, ust, crash
Do Kwon

Stablecoins are a form of crypto whose value is pegged to fiat currency or another “stable” value like the US dollar. TerraUSD is an algorithmic stablecoin which means it derives the value not from physical assets in a bank but via the relationship to the Terra floating value crypto LUNA. The reserves are intended for use should this derived peg breaks down. Terra co-founder Do Kwon sees the transition to BTC backing as being the best itnerest of UST’s long-term price stability:

“For the first time, you’re starting to see a pegged currency that is attempting to observe the bitcoin standard  It’s making a strong directional bet that keeping a lot of those foreign reserves in the form of a digital native currency is going to be a winning recipe.”

Kwon said that he expects Terra to raise the reserves up to its long-term goal of $10 billion by the end of the quarter and with the current holdings alone, Terra is in the ranks of the top 10 biggest addresses even though the data doesn’t reflect that at the time of writing. LFG’s displayed reserves are also awaiting an update in figures. Brian Curran said:

 “The reserve dashboard will be updated to reflect the changes once the multi-sig process is completed for sending the BTC from the corresponding wallets used in the OTC deals to the public LFG wallet address.”

 

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