Gripping news is coming from Terraform Labs (TFL) and the Luna Foundation Guard (LFG) to diversify its UST reserves beyond Bitcoin (BTC). Recently, they have announced a combined purchase of $200 million worth of AVAX tokens from Avalanche Foundation.
While both Terra and Luna are looking to strategically align UST and LUNA (native coins of respective foundations) in the market, AVAX prices have risen to 3% 24 hours after the announcement.
Terra Blockchain developed by TFL has swapped $100 million worth of its native token UST for Avalanche Foundation’s native token AVAX. Similar action will be performed by Luna Foundation Guard for another $100 million of capital to buy AVAX. Now, through this cross-chain networking UST can be minted and redeemed on the Avalanche blockchain.
Do Kwon, Founder of TFL and LFG told TechCrunch about its strategic investment in Bitcoin. Till now both organizations own $1.6 billion worth of Bitcoin as of this date, while yesterday they announced another purchase of $1.4 million of BTC tokens (about 5,000 BTC) with LFG capital. Kwon plans to build a reserve of $10 billion worth of Bitcoin for Terra and Luna in such a manner, that people who want to mint UST can put their BTC into the reserve for successful minting pro.
Apparently, Kwon will continue to merge with other stable coins and Layer-1 protocols to back UST’s position in the cryptocurrency market.
“We’re big believers of Bitcoin, so we’re just going to continue to buy whenever there’s an opportunity to. Overtime, Terra is going to be backed by a basket of the top Layer 1 assets.”Do Kwon, Founder TFL and LFG
Currently, Terra is in a stage to strengthen its native coin UST in the industry as other stablecoin competitors like NEAR protocol are rumored to release a stablecoin USN soon. Near Protocol is Layer-1 blockchain technology and a strong competitor to both Terra and Ethereum.
Moreover, Near is planning to provide a decentralized finance protocol service capable to give an annual percentage yield (APY) of 20% on USN deposits. Currently, Anchor Protocol which is a product of the Terra ecosystem offers an APY of 19.49% on UST deposits to its users.