The Luna Foundation Guard (LFG), a non-profit organization supporting the Terra USD (UST) stablecoin, has announced a $1 billion fundraising round through the sale of LUNA tokens. The capital will establish a Bitcoin-denominated reserve for UST, one of Terra’s primary stablecoins.<\/p>\n
Jump Crypto and Three Arrows Capital led the funding round, with participation from DeFiance Capital, Republic Capital, GSR, and Tribe Capital, Terra disclosed in a Tuesday tweet.<\/p>\n
Terra stated its decision to denominate the reserve in Bitcoin stems from the cryptocurrency’s perceived low correlation with the Terra ecosystem. Further details on the reserve’s operational mechanics are expected in the coming weeks.<\/p>\n
The Terra platform’s website explains that UST maintains its dollar parity through “simple supply and demand market dynamics.”<\/p>\n
Separately, Terraform Labs founder Do Kwon announced Friday an injection of $450 million in UST into the reserves of the Anchor lending protocol, following a vote organized by the LFG.<\/p>\n
This initiative aimed to alleviate concerns from observers who had highlighted the depletion of Anchor’s reserves in recent weeks. Anchor, a key protocol within the Terra network, continues to operate at a deficit. This shortfall is attributed to the highly attractive yields it offers, currently providing an annual interest rate of 19.44% on UST stablecoins.<\/p>\n
At the time of this report, LUNA traded near $59, marking a more than 12.5% increase over the preceding 24 hours. The digital asset remained significantly below its all-time high of $103.33, recorded on December 27.<\/p>\n
Days prior, Terra had emerged as the second-largest decentralized finance (DeFi) platform by total value locked (TVL), trailing only Ethereum.<\/p>\n