The large sum was raised by selling the LUNA token, which is the Terra ecosystem’s original asset. Jump Crypto, Three Arrows Capital, Republic Capital, GSR, Tribe Capital, DeFiance Capital, and a number of angel investors were among the venture capitalists who participated in the round.
(LUNA ) Terra tweeted on Feb. 22 that the billion-dollar private token sale is one of the largest in the cryptocurrency sector to date. The profits from the sale will be used to create a Bitcoin-denominated forex reserve for the Terra ( LUNA) UST stablecoin.
The non-profit LFG was founded in Singapore in January to assist in the management and growth of the Terra ( LUNA) ecosystem, which is currently ranked ninth in terms of market valuation.
Terra’s UST stablecoin (TerraUSD) has a market valuation of $12.3 billion, making it the fourth largest stablecoin in the business. Its supply has increased by about 2,000 percent since last year, allowing it to surpass DAI.
UST is an algorithmic stablecoin that responds to demand by increasing and decreasing supply. One major critique of algorithmic stablecoins, according to the Terra (LUNA) team, is their “reflexive nature and the potential risk of a ‘bank run’ situation.” Other DeFi stablecoins based on similar mathematics have already experienced this.
Terra believes that establishing a reserve will assist to ease such problems.
The reserve will be stocked with BTC at first, but additional non-correlated assets will be added over time. Lastly, The LUNA coins purchased by the venture capital firms will be locked up for four years.
Terra established a relationship with the Washington Nationals of Major League Baseball earlier this month.
LUNA prices have risen 14.5 percent in the last 24 hours as a result of the announcement. So, According to CoinGecko, the cryptocurrency was trading at $56 at the time of writing, wiping back all losses over the previous week.
LUNA, on the other hand, has lost 20% in the last month and is now trading at $46% below its all-time high of $103 set on December 27.
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