Luna Foundation to Add $100 Million in AVAX to the UST Decentralized Forex Reserve

Following the Luna Foundation Guard’s (LFG) acquisition of 5,040 bitcoin connected Wednesday, the pursuing time the Singapore-based non-profit announced it volition beryllium acquiring $100 cardinal avalanche (AVAX) tokens. LFG elaborate connected Thursday that the acquisition is meant to strategically align the Terra web with Avalanche ecosystems.

LFG to Add $100 Million successful Avalanche Backing to UST Reserve

On Thursday, the Luna Foundation Guard announced that it inked a woody with the Avalanche Foundation to get $100 cardinal worthy of AVAX, the Avalanche blockchain’s autochthonal asset. LFG is simply a non-profit dedicated to fostering decentralized concern (defi) via the Terra (LUNA) web and the blockchain’s algorithmic stablecoin UST. LFG elaborate that the extremity down purchasing AVAX was meant “to assistance bolster its UST Decentralized Forex Reserve and strategically align the 2 ecosystems.”

Both LFG and the Avalanche Foundation volition beryllium handling the transaction successful an over-the-counter (OTC) fashion. AVAX volition go the 2nd non-correlated plus successful the UST Reserve pursuing the caller bitcoin (BTC) backing. The property merchandise sent to Bitcoin.com News explains that LFG volition wage for the AVAX utilizing the stablecoin UST. The announcement besides follows the Anchor Protocol adding AVAX support. Anchor enforcement Ryan Park announced connected March 17 that Anchor present supports Avalanche via Xanchor (Cross Anchor), which is an “extension to Anchor Protocol.”

“The premise of the UST Reserve is to supply a backstop against UST peg deviations successful instances of crisp contractions of UST request exogenous to Terra’s algorithmic model,” Nick Platias, a Governing Council Member of LFG explained connected Thursday. Platias further discussed the benefits of diversification erstwhile it comes to protecting the UST Reserve. Platias added:

By diversifying the basal of non-correlated assets to large assets similar BTC and AVAX, the UST Reserve offers a much robust plus excavation to support against volatility and alleviate unit connected the Terra protocol’s unfastened marketplace arbitrage incentives.

The announcement further notes that Avalanche users volition beryllium capable to commercialized UST for AVAX onchain connected the Avalanche blockchain. “We are thrilled that our partners astatine LFG volition beryllium adding AVAX to their fast-growing UST reserve,” Emin Gün Sirer, manager of the Avalanche Foundation said successful a connection connected Thursday. “Decentralized stablecoins similar UST are proving captious to crypto ecosystems, and AVAX provides a large reserve plus adjacent to BTC. We besides look guardant to collaborating connected projects that volition proceed to turn some the Terra and Avalanche ecosystems,” Gün Sirer added.

Currently, since LFG’s past bitcoin (BTC) purchase of 5,040 BTC connected Wednesday, the non-profit’s wallet has not seen immoderate further bitcoin deposits. While Anchor Protocol’s Xanchor level supports Avalanche, the defi protocol’s documentation hints astatine “bringing each of Anchor’s functionality to different non-Terra blockchains.” LFG has not disclosed if the diversified UST Reserve volition leverage different autochthonal crypto assets too bitcoin (BTC) and avalanche (AVAX) going forward.

What bash you deliberation astir LFG adding $100 cardinal successful AVAX to the UST Reserve? Let america cognize what you deliberation astir this taxable successful the comments conception below.

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