Earlier this month, Terra (LUNA) announced its plan to accumulate $10 billion worth of Bitcoin.
To update people on this goal, Terra co-founder and Chief Executive Officer of the company, Do Kwon, revealed that they have already accumulated close to $2.2 billion. He provided a breakdown of how the money was accumulated, stating that LFG rose $1 billion by selling LUNA tokens and $1.2 billion by selling UST for Tether. The company is now short of $800 million to boost the BTC reserves to achieve their short-term target of BTC worth $3 billion.
Do Kwon’s Recent Interview
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The CEO had an interview with Udi Wertheimer, where he revealed that the company found Bitcoin as a better choice than other coin based assets found in Crypto Lists. He specifically said that Bitcoin is the only crypto asset with a hard code base better distributed than any other digital asset. Kwon also said that Bitcoin would backstop short-term UST redemptions.
The company revealed that the BTC reserves would be used by Luna Foundation Guard (LFG)—a non-profit organization that works on the Terra blockchain. LFG defends Terra’s independent stablecoin known as UST from high price volatility and market discrepancies. He went on to say that the stablecoin may keep part of seigniorage aside to achieve their $10 billion marker.
If LFG maintains a large Bitcoin reserve, it will be possible for users to redeem UST for Bitcoin. As a result, the move will instill confidence among UST holders and possibly attract more users.
Is Terra (LUNA) Putting Its Money Where Its Mouth Is?
Taking from Do Kwon’s statement, the goal to accumulate a massive trove of Bitcoin reserves isn’t just an idea; it’s already happening. The Terra co-founder confirmed that they have been purchasing BTC already.
American Crypto influencer Lark Davis described Terra’s move as incredible and potentially an action that will start a major move in the crypto world. On the other hand, Anthony Pompliano—a YouTuber and US investor, suggested that the move by Terra is encouraged by the knowledge that UST isn’t best suited for the future, particularly because stablecoin’s algorithm is backed by supply manipulation in order to keep its dollar value stable.
Pompliano also added that transitioning to stablecoins that are backed with BTC is a major deal. However, he said that if Do Kown is successful in his mission and becomes a persistent buyer, they will show central banks and other companies how to back their assets with Bitcoin. Pompliano finished his statement by saying that backing assets with BTC will be the standard since Bitcoin is currently the world’s most pristine collateral.
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Kwon’s bets with GCR and Sansei Algod Worth Millions of US Dollars
An action that can be seen as the motivation or Kwon’s confidence in the move to buy Bitcoin assets was about a $10 million bet he made with a crypto personality known as Gigantic Rebirth (GCR).
The bet is based on whether the price of LUNA will increase or decrease, after a one year from the date of the bet. The details about the gamble are; Kwon bet that the price of LUNA would be higher than US$88, while GCR bet against that statement.
Before the high stake bet, Kwon had challenged Sensei Algod that LUNA won’t suffer a price crash. (Sensei Algod is a pseudonymous crypto Individual who doubles as a critic.) This challenge ended with a smaller bet that amounts to $1 million. However, Kwon offered 2:1 odds to Sensei if he accepts the wager.
In both bets, each party sent their funds in form of stablecoins to a third party’s Ethereum wallet. This person is another known crypto trader known as Cobie on Twitter, who twitted, “May the best degen win” after receiving the wager funds.
About Terra?
Terra is a popular next-generation blockchain payment network that’s interwoven with stablecoins. This brand of crypto is powered by LUNA token—layer-1 blockchain protocol with smart contract functionality. This feature enables the blockchain to work as a payments-focused fintech ecosystem that leverages algorithmic stablecoins. The stablecoins value is maintained by internal algorithms.
The company was founded by Do Kwon and Daniel Shin. The dual also founded Terraform Labs in 2018, the company behind the Terra ecosystem in South Korea. The project kicked off after Terraform Labs secured $32 million of funding from lead investors. The investors include OKEx, Binance Labs, and Huobi Capital. Another major investor was Dunamu & Partners—an investment arm of Seoul-based Upbit, which deals with crypto exchange.
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