The Luna Foundation Guard has continued to make Bitcoin purchases in order to back its stablecoin, with recent transaction about $1.5 billion
Stablecoins are cryptocurrencies whose market value is intended to be tied to the value of a more stable asset. The Luna Foundation Guard has completed another transaction, bringing it one step closer to its aim of amassing $10 billion in Bitcoin to support the United States Terra stablecoin, often known as UST.
Founder and CEO Do Kwon of Terraform Labs, the company that pioneered the Terra blockchain, predicted that the $10 billion objective will be reached by the end of the third quarter. Terraform Labs is the company that introduced the Terra blockchain.
Do Kwon, said: “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. The jury’s still out on the effectiveness on the subject, but I think it is symbolic in the sense now that we live in a time where there’s excess money printing across the board and when monetary policies highly politicized that there are citizens that are self-organizing to try to bring systems back to a sounder paradigm of money.”
Previously held reserves of 42,530.82 BTC have nearly doubled to 80,394 BTC as a result of this increase. With the support of Three Arrows Capital, the organization was able to complete another $500 million over-the-counter buy through the help of Genesis Trading after exchanging $1 bln in UST stablecoin for Bitcoin with the exchange. Terra’s total reserves now stand at much more than $3 billion, with the vast majority of that amount held in Bitcoin. It owns lesser stakes in LUNA, AVAX, and the USDT and USDC stablecoins, among other things.
Not only does Luna Foundation Guard make high-profile Bitcoin purchases, but so does every other corporation in the world. MicroStrategy, a business analytics company that is publicly listed, continues to accumulate sats independent of the price of Bitcoin. In April, the company added 4,197 Bitcoins to its reserves, bringing the total amount of Bitcoins it currently holds to 129,218 Bitcoins.
Following the announcement of the launch of a Bitcoin reserve-backed stablecoin, Blockchain CEO Adam Back, a well-known player in the cryptocurrency world, expressed concern about where the money would come from for the project. Kwon has previously stated that the project will amass around $ 10 billion over the course of its existence. The practice of adding extra Bitcoin to the reserves is getting the corporation closer to the objective of having all of the Bitcoin in the reserve by the end of 2022, which it is on schedule to achieve.
The acquisition of the initial $1 billion in Bitcoin by LFG was made possible via a well-known cryptocurrency prime trader, Genesis, through an over-the-counter (OTC) exchange of UST Stablecoin for Bitcoin. This over-the-counter transaction was the first of its sort at the size that was achieved. The remaining $500 million was collected through Three Arrows Capital (3AC), a cryptocurrency hedge fund that is considered to be the best in the business.
The US dollar is tied to the UST. The issue and burning of LUNA coins serve as the basis for the pegging mechanism. Burning LUNA may be used to create UST at periods when the price of the cryptocurrency is more than $1. After then, burning LUNA lowers the availability of LUNA, which raises the value of LUNA on the market. The LFG has been actively acquiring BTC in order to meet its $10 billion BTC reserve objective.
