https://ift.tt/pheJBdx Foundation’s Treasury Nears 40,000 Bitcoin ($BTC)

The Luna Foundation Guard (LFG) a non-profit mandated to build reserves for Terra’s algorithmic stablecoin UST, has added around $173 million worth of the flagship cryptocurrency Bitcoin ($BTC) to its holdings over the weekend through a series of purchases.

The Luna Foundation Guard, as CoinDesk reports, how has around 39,897.98 BTC in its wallet, which are worth over $1.66 billion. The purchases come shortly after the LFG and Terraform Labs both purchased $200 million in Avalanche ($AVAX) to create a reserve for UST.

According to data shared by the LFG, BTC now makes up around 64.1% of the stablecoin’s reserve, with around 15.4% being in the USDC stablecoin and 6.4% being in the UST stablecoin. Roughly 14.1% are in Terra’s native token LUNA.

Notably, LFG’s figures, shared via Google Data Studio, do not mention the AVAX it has purchased and show a total reserve balance of $2.58 billion. The AVAX reserve is reportedly being kept on the Avalanche blockchain, and the Terra network’s applications are also going to be launched on Avalanche as part of the deal. Terra’s BTC reserves, it’s worth noting, are in tokenized BTC on the Terra blockchain.

Terra’s founder Do Kwon has in the past suggested the Terra Protocol will be one of the largest holders of the flagship cryptocurrency as the project creates its BTC-denominated reserves to build an additional layer of security for its decentralized stablecoin.

Terraform Labs has plans to accumulate $10 billion worth of Bitcoin to add to the project’s stablecoin reserves.

Terra is a Proof of Stake (PoS) blockchain in which LUNA is used to keep the algorithmic stablecoin’s peg to the U.S. dollar. While UST isn’t backed by any assets in reserve, its value is fixed through the minting and burning of LUNA as users can always swap $1 worth of LUNA for 1 UST and vice-versa.

If the price of UST drops below $1, it can be swapped for LUNA and sold for $1, making it attractive for arbitrage traders. If it goes over the $1 mark, LUNA token holders can trade tokens for 1 UST for a profit. LUNA is minted and burned to enable these transactions.

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