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On the afternoon of April 14, Terraform Labs announced that it had “donated” 10 million LUNA to the Luna Foundation Guard to strengthen the reserve for stablecoin UST.
Terraform Labs (TFL) is the development company behind the Terra blockchain and stablecoin UST. TFL transferred 10 million LUNA ($880 million) to Luna Foundation Guard to further acquire Bitcoin (BTC) as a reserve asset for stablecoin UST.
Luna Foundation Guard currently holds over $2.4 billion in cryptocurrencies, including BTC, LUNA, USDC, and USDT. At the same time, the market capitalization of stablecoin UST is above $17 billion.
The funding is aimed at diversifying the reserve fund. Recently, Luna Foundation Guard and Terraform Labs spent $200 million to buy Avalanche’s AVAX token, but this coin is not yet on the organization’s statistical list.
This is not the first time Terraform Labs has provided a large amount of LUNA to the platform. Previously, in March of this year, Terraform Labs sent 12 million LUNA (equivalent to 1.1 billion USD at that time) to Luna Foundation Guard to buy Bitcoin.
Terraform Labs CEO Do Kwon said the next step for LFG is to build a $3 billion reserve fund for the UST. The fund’s future goal is to reserve $10 billion worth of bitcoin. Do Kwon also announced plans to buy more bitcoins to accumulate until the platform’s BTC reserve is second only to bitcoin’s creator, Satoshi Nakamoto.
Since the end of 2021, there have been many accusations that Terraform Labs is just a ponzi scheme when the LUNA ecosystem is nothing special except UST and the Anchor Protocol project paying 20% interest per year. There are also rumors that Terraform Labs is doing everything to keep the price of both LUNA and UST, including creating the Luna Foundation Guard.
The move to buy bitcoin as a reserve asset for stablecoin UST is seen as using BTC to save the entire ecosystem from the risk of collapse, causing the crypto community to continue pouring money into Terra.
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