After buying more than $1 billion worth of bitcoin in the last few weeks, Terra decided to take an interest in other cryptocurrencies as well. Both Terraform Labs and Luna Foundation Guard have announced plans to conduct a total of two token swaps with Avalanche. The total value of both transactions will amount to USD 200 million.
SUPPORT FOR UST reserves in AVAX
Recently, we have informed about several BTC purchases made by the Do Kwona – Terra project. The team wants to increase its bitcoin reserves to $ 10 billion to support the reserve of its stablecoin – UST. At the moment, Terra already has nearly 36,000 BTC, whose value at the current rate is over $ 1.5 billion.
Nevertheless, Terraform Labs has also unveiled plans to work with Avalanche to exchange $100 million worth of LUNA tokens for AVAX.
Luna Foundation Guard (LFG), another organization that supports Terra’s blockchain, has announced a similar move. It agreed to a $100 million over-the-counter transaction to include AVAX in the UST reserve, making the native Avalanche cryptocurrency “the first major cryptocurrency besides BTC to be added to the UST reserve.”
According to the Terra team, this will be the beginning of a “diversified and uncorrelated pool of assets supporting the UST’s pegging of the U.S. dollar.”
Avalanche – the most exciting web3 ecosystem?
A little later, Do Kwon – CEO of Terraform Labs – presented further details about the cooperation. He described Avalanche as “one of the most exciting ecosystems on web3.”
He explained that AVAX tokens will be used to create a reserve on the UST using an automatic knockout mechanism, the same as for bitcoin. This means that UST will become the native stablecoin of the Avalanche network and can be minted and exchanged for AVAX on this blockchain.
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