Terra founder Do Kwon revealed plans to expand UST’s bitcoin holdings to $10 billion in a tweet on Tuesday. The Luna Foundation Guard has already raised $2.2 billion and plans to raise the $3 billion short-term target.
With a long-term goal of $10 billion. Do Kwon feels that the sovereignty of the UST stablecoin is the only realistic model for scaling decentralized money.
Do Kwon’s Plan to Increase Bitcoin Reserves of UST
In a tweet, Terra’s founder announces a plan to build $10 billion in BTC reserves for TerraUSD (UST). He claims that UST peer-to-peer electronic money is more appealing to possess and easier to spend than Bitcoin. Regarding the current state of the UST’s bitcoin reserve and infrastructure. he said:
It’s not 10B today – as UST money supply grows a portion of the seigniorage will go to build BTC reserves bridged to the Terra chain. We have 3B funds ready to seed this reserve, but technical infrastructure (bridges, etc.) is still not ready yet.
The Luna Foundation Guard (LFG), a non-profit for the Terra ecosystem established in Singapore, has already raised $2.2 billion. From which, $1 billion was raised through an over-the-counter sale of Terra’s native token, LUNA, in order to create a decentralized UST FX reserve priced in Bitcoin. The $1 billion funding round included Jump Crypto, Three Arrows Capital, GSR, DeFiance Capital, Republic Capital, Tribe Capital, and others. While t the remaining $1.2 billion was raised through the sale of UST in exchange for Tether.
Despite a selloff in the crypto market, Do Kwon believes bitcoin can help the price of TerraUSD (UST) stay tied to the US dollar. UST is an algorithmic stablecoin that burns or manufactures LUNA to stay tied to the US dollar, unlike other stablecoins.
As a result, Kwon and LFG may be attempting to improve UST stability with the dollar by establishing a $10 billion bitcoin reserve.
UST and LUNA price changes
The price of Terra (LUNA) is currently trading at $95.28, rising nearly 2% in the last 24 hours, as at the time of writing. The LUNA price has risen about 20% in the last week, with the UST price being tied to the US dollar. The price of Bitcoin (BTC) may reach new highs as Terra prepares to establish its massive bitcoin reserve.