Terra, which has already purchased over $1 billion worth bitcoin in just weeks, is now interested in other cryptocurrencies. Terraform Labs, Luna Foundation Guard and Terraform announced plans for two token swaps in total worth $200 million with Avalanche.
The frequent BTC purchases from Terra, as the team wants to build up its bitcoin reserves up to $10 billion to back up its stablecoin – UST. Terra currently owns over 36,000 BTC and is worth more than $1.5 billion.
Terraform Labs, however, is available. outlined a collaboration with Avalanche that will see the former complete a $100 million LUNA – AVAX token swap.
Separately, there is the Luna Foundation Guard (LFG), an organization that supports the Terra blockchain. saidIt will follow the example. It agreed to an OTC deal worth $100 million as well to add AVAX to the UST reserve, which made Avalanche’s native cryptocurrency the “first major crypto-asset besides BTC to be added to the UST reserve.”
According to the Terra team, this will mark the beginning of a “diversified and non-correlated asset pool supporting the UST peg.”
Later on, Do Kwon – Terraform Labs’ CEO – provided more details on the collaboration with Avalanche, referring to the latter as “one of the most exciting ecosystems in web3.”
He explained that LFG’s AVAX tokens will be used to provide a reserve against UST using the automated mint mechanism identical to the one for bitcoin.
This means that UST can be minted on the Avalanche Blockchain and redeemed against AVAX.
9/ Everybody is welcome to call us @avalancheavaxProject to work with Terra to grow together.
Decentralized economies need decentralized money, and happy to work on blitzscaling Avalanche’s for the years to come.
— Do Kwon 🌕 (@stablekwon) April 8, 2022