Terra News: Terra expands its Bitcoin reserve, Terraform Labs donates $820 million to the LFG

Terraform Labs CEO Do Kwon said last month that the project’s current long-term goal is to build over $10 billion in Bitcoin reserves for the UST stablecoin. The blockchain platform has made good progress towards this goal so far. The last bitcoin purchase was completed today.

Terra’s LFG stacks the reserves and grabs another 2.5k Bitcoin

Data provided by BitInfoCharts shows that Terra’s Luna Foundation Guard made two deposits to his Bitcoin wallet this week. The latest, which happened today, involved 123.89917 BTC — a transaction that cost the foundation nearly $5 million. Earlier Wednesday, LFG added another 2,508.94 BTC — it now holds 42,530.82726616 BTC.

This reserve is valued at approximately $1.71 billion at the time of writing. However, the stocks are languishing with $81.42 million in losses due to the collapse in assets in the market.

While bitcoin was the primary token of choice for building reserves, Terra said last week that it is diversifying, with Avalanche’s AVAX being first. LFG traded UST for $100 million worth of AVAX, and Terraform Labs traded another $100 million from Terra’s LUNA for AVAX. Terra announced that it plans to add even more leading Layer One assets to the UST backers’ basket.

The ultimate goal is to ensure the stability of the UST peg to the dollar, even in extreme cases such as a black swan event. Bitcoin is seen as the key reserve to fulfill this role as Do Kwon has told Bloomberg that Bitcoin additions will continue each time UST is minted. He also said the decision to join Avalanche was based on his loyal fans and budding growth.

Terra’s stablecoin market is set to get a boost from Acala and Anchor Protocol’s collaboration

Polkadots Acala announced via a blog post on Wednesday that it is working with Anchor Protocol, a lending tool on Terra’s blockchain, to expand the larger stablecoin space.

In this line, Acala and Karura – a Kusama-based polkadot parachain – will expand the basket of collateral options available for UST (Terra’s leading decentralized algorithmic stablecoin). Acala will boost UST options via its stock liquid staking derivatives – Liquid KSM, LKSM, while Liquid DOT, LDOT will suffice for Karura.

The move will also aim to establish “stand-up deep liquidity pools,” which would allow users to gain access to both ecosystems — Terra and Polkadot. The pools would first be developed on Acala before spreading to other parachains and layers. They will use UST and Polkadot USD stablecoins to enable operations on both sides of the divide.

There are further plans to provide even more integrations in the future to collectively fuel the growth of the decentralized stablecoin scene.

Anchor Yield is now accessible for Polkadot

The announcement also revealed that Polkadot users looking to generate a stable return via Anchor Yield could start bridging their assets (LDOT and KSM) via Wormhole. The assets (now on Terra) can then be collateralised to lend UST on Anchor. These Dotsama borrowers (Polkadot and Kusama) would then receive ANC incentives and may also deposit their UST to earn that return.

Terraform Labs donates $820 million worth of LUNA to the Luna Foundation Guard

Terraform Labs, the blockchain developer behind LUNA, has gifted Luna Foundation Guard with 10 million LUNA worth approximately $820 million at current market prices. The Luna Foundation Guard is the non-profit organization that builds reserves for Terra’s UST (the largest algorithmic stablecoin by market cap) to maintain its peg to the US dollar.

Terraform Labs announced this on Thursday via Twitter. However, transaction details show that of the 10 million tokens, 7.8 million LUNA were transferred from the LFG reserve wallet. This gift is supported by an additional $1.1 billion ($12 million LUNA) donated to the Luna Foundation Guard last month. The tokens should increase reserves for the UST stablecoin.

The transfer increased LFG’s reserves to $2.43 billion, with bitcoin dominating about 70% of the portfolio. The continued buying spree of the leading digital asset token has made Terra one of the world’s largest holders of “digital gold”.

Terra (LUNA) market performance

Recent bullish developments surrounding Terra have not been sufficiently influential to halt the fall in the price of its native asset LUNA. The token is down 17.50% over the past seven days, falling from $98.8 to $81.43 on the write.

LUNA/USD 7-day trading chart

This drop – which is prevalent throughout the cryptocurrency market – is significantly larger compared to other altcoins. Solana (SOL) and Cardano (ADA) are down 12.44% and 11.25%, respectively, while Avalanche (AVAX) is down 10.78% over the same period. On the day, LUNA/USD is down 5.51% – the widest range among the top ten cryptocurrencies.

To learn more about Terra, visit our Investing in Terra guide.

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