Terraform Labs, behind the Terra project, bought $200 million worth of AVAX coins to strengthen its own stablecoin.
According to a Twitter post, Terraform Labs has swapped its LUNA coins for $100 million worth of AVAX. In addition, the Luna Foundation, a non-profit organization authorized to create reserves for the algorithmic stablecoin UST, used its assets to buy AVAX for another $100 million. In this way, the company wants to strengthen its own stablecoin, which now has a market capitalization of $16.7 billion.
Terraform Labs founder Do Kwon stated that the company chose AVAX for its reserves due to the steady growth of the Avalanche blockchain ecosystem and user loyalty. Earlier, the Luna Foundation announced the successful completion of a private sale of $1 billion of LUNA tokens. These funds are planned to be used as a reserve for the UST stablecoin.
Note that the main competitor of Terra and Ethereum, Near, plans to release its own stablecoin, as well as the development of a decentralized finance (DeFi) protocol that will provide users with a 20% annual return. Experts believe that the growth of this network, combined with the issuance of a stablecoin and the subsequent development of DeFi protocols, will eventually allow Near to reach a market capitalization of $11.7 billion.
Recall that Terraform Labs recently purchased bitcoins worth $230 million. The total number of bitcoins that the company now owns is 35,767 BTC ($1.5 billion).
