TerraUSD (UST) is backed by $10 billion or more in Bitcoin reserves. It will “begin a new monetary age of the Bitcoin standard,” according to Kwon.
Terraform Labs (TFL) and Terra (LUNA), an Ethereum competitor, founded by Do Kwon. He has stated that he intends to amass $10 billion in Bitcoin (BTC) for the project’s stablecoin reserves.
Terra is a decentralized blockchain platform that specializes in the manufacture of stablecoins. Terra USD (UST), an algorithmic stablecoin that is tied to the US dollar’s value. It maintains its USD value in part by issuing a similar amount of LUNA, its native token.
Terra will not Sell LUNA
At this point, specific details are scarce. Terra will not sell its native asset LUNA to develop reserves, according to Kwon, who stated this on Twitter. He also stated that additional information will release soon.
Kwon also boasted that its stablecoin TerraUSD (UST) backs by more than $10 billion in Bitcoin reserves. The Bitcoin standard will usher in a new monetary age. He went on to say that P2P electronic cash is easier to spend and more appealing to hold.
Kwon was questioned if the plans were already in place or if it was simply a concept at this point. He just stated that he did not comprehend the difference. They’ve already started purchasing Bitcoin.
What are the BTC Reserves for?
Kwon was asked on Twitter what the BTC reserves will be used for. He said the cash would use to backstop short-term UST redemptions as well as create a decentralized FX reserve.
Kwon also claimed in a subsequent tweet that they have begun purchasing BTC and that Twitter had verified him. This is a reference to Jack Dorsey, the former CEO of Twitter and a Bitcoin bull.
For the second time this month, Kwon has announced efforts to bolster Terra’s stablecoin reserves.
TFL’s Donation to LUNA
On Friday, TFL made a 12 million LUNA donation to the Luna Foundation Guard LFG. This is due to a pool imbalance on Curve Finance, which necessitated intervention due to excessive demand for UST.
TFL had donated 12 million LUNA ($1.1 billion) to the Luna Foundation Guard at the time of publication (LFG). LFG established in January with the purpose of growing the Terra ecosystem and ensuring the long-term viability of its stablecoins. The money, which denominates in LUNA, will burn to mint UST in order to increase the LFG’s reserves, according to Kwon.
UST’s market capitalization now stands at $15.12 billion.