The Luna Foundation, spearheaded by Do Kwon, has now acquired approximately 24,954.96 BTC for its programmable stablecoin reserves. According to Blockchain explorer, this puts the total cost of this transaction at approximately $1.1 billion.
Do Kwon, founder of Terraform Labs and Terra, an Ethereum layer 1 blockchain competitor, is following up on its commitment to accumulate $10 billion worth of Bitcoin (BTC) to add to the project’s stablecoin reserves. With an accumulation worth $1.1 billion, we expect another $8.9 billion BTC purchase in the long term.
According to Bit Info Charts, the wallet address has been accumulating Bitcoin since January 2022 and has increased its holding significantly since the 22nd day of March 2022. The wallet address is now #33 on the richest Bitcoin wallet list.
What you should know
- Terra has developed, in seemingly very little time, an extremely strong DeFi ecosystem largely based around its stablecoin UST and is now the leading blockchain in terms of staked value, ahead of Solana, Ethereum, Cardano, Avalanche and the rest.
- Late last month, the plan to form a Bitcoin reserve for Terra’s UST stablecoin was revealed when $1 billion from crypto-focused venture capitalists was raised for this purpose by The Luna Foundation Guard. That funding was formed from a private sale of Terra’s LUNA tokens.
- Do Kwon explained that the foundation would purchase $3 billion in the short term and the remaining $7 billion at a later future date, with no specific dates outlined.
- Terra’s Bitcoin purchase has raised many questions among the crypto community, with many asking if purchasing the flagship digital asset was the right choice instead of backing an asset within its ecosystem.
- However, many have argued, with a twitter user, CryptoKidDonni1, explaining that it is “a bet to secure their ecosystem by holding less correlated assets that have underlying value if their ecosystem were to fail. Most currencies used to be backed by gold to insure its value (gold standard), and Luna is recreating (something) similar with Bitcoin (Bitcoin Standard).”
Anthony Pompliano, in his newsletter, opined that “the move to back UST with Bitcoin creates a symbiotic relationship, which allows UST to have confidence that the asset is backed by the most superior collateral.”
Many have attributed the recent jump in Bitcoin’s price to this recent buying spree by the Terra Foundation. Bitcoin currently trades $44,700 as of the time of this writing, nearly piercing through the $45,000 resistance zone.
