Terra Adds More Bitcoin to UST Reserve
Do Kwon, the founder of the Terra blockchain, had recently announced that the reserve fund aimed at supporting the stablecoin UST would be increased to $10 billion worth of Bitcoin.
The promise is kept, because we have recently seen that new purchases are made on a regular basis over the counter (OTC). The latest endowment took place this Sunday, for an equivalent of 4,130 new bitcoinsacquired for a value of $176 million. This brings the total reserve to nearly 40,000 BTC.
The Luna Foundation Guard (LFG) gives the possibility of following the evolution of this reserve guaranteeing the stability of the UST, we see that Bitcoin represents 64.2% of its total at the time of writing this article:
Terra Reserve Fund Allocation
At present, this fund is therefore composed as follows:
- 39,900 BTC for $1.69 billion;
- USDC 398.66 million;
- 4.27 million LUNA for $378.17 million;
- USDT 164.36 million.
This therefore brings to a total of $2.63 billion which provides additional protection for the reliability of the algorithmic stablecoin.
? To go further – Find our complete guide on the UST stablecoin
A growing fund
Before the purchase of this Sunday, it should also be noted that April 6 had seen an influx of 5,040 BTC to this famous reserve. It is also a safe bet that these purchases will become recurring over time, until they reach at the threshold of 10 billion dollars.
Moreover, it seems that the LFG does not want to limit itself to Bitcoin. In effect, $100 million from AVAXthe native token of the Avalanche ecosystem, will also soon be added to the fund.
It is a real diversification strategy that is put in place in order to decorrelate itself from its own blockchain.
Moreover, if the UST is still in fourth position in the ranking of stablecoins with a capitalization of 16.7 billion dollars, it may soon overtake Binance’s BUSD which records for its part 17.9 billion.
While the algorithmic stablecoin is initially built to balance naturally at $1 through arbitrage, we see that Terra has been able to put in place an additional layer of stability that can reinforce the investor confidence.
? On the same subject – Terra (LUNA) will have a reserve of 10 billion dollars in Bitcoin (BTC)
Source: Fund Bitcoin Address, Reserve Breakdown
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About the Author : Vincent Mayor
I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
All articles by Vincent Maire.