Terraform Labs (TFL) and the Luna Foundation Guard (LFG) have introduced they’ve bought a mixed $200 million price of AVAX tokens from the Avalanche Foundation.
TFL, the corporate liable for the event of the Terra blockchain, swapped $100 million price of Terra’s native token, LUNA for AVAX tokens, with the intention to “strategically align ecosystem incentives”, in keeping with Terra’s twitter.
LFG, a non-profit group mandated to construct reserves for Terra’s algorithmic stablecoin UST, used its personal holdings of UST to buy an extra $100 million price of AVAX from the Avalanche Foundation.
These purchases are supposed to reinforce the soundness of Terra’s native UST stablecoin, which at the moment has a market cap of $16.7 billion.
Do Kwon, the founding father of Terraform Labs, informed Bloomberg that LFG chosen AVAX for its UST reserves due to stable progress within the blockchain’s ecosystem in addition to the stark loyalty of its customers.
“Avalanche is still a growing ecosystem — a lot of it is fueled by loyalty to the AVAX token and users feel a lot of affinity with an asset that aligns itself with AVAX…whereas for the average Ethereum user, aligning yourself with Ether doesn’t really mean that much.”
As Terra continues to strengthen the place of UST, rivals are in search of new methods to dethrone the stablecoin. Near Protocol (NEAR), a Layer-1 blockchain and competitor to each Ethereum and Terra, is rumored to be releasing a stablecoin known as USN, which can reportedly additionally provide a decentralized finance protocol able to offering customers with a 20% annual proportion yield (APY) on their USN deposits.
This is much like the Terra ecosystem’s Anchor protocol which at the moment provides customers a 19.49% APY on UST deposits.
In a Substack publish detailing what he understands of the plans, Crypto Insiders Telegram group founder Zoran Kole argued that Near protocol was superior to each Etheruem and Terra, providing knowledge from Electric Capital that outlined Near Protocol’s substantial progress when it comes to improvement.
Kole concluded that Near’s community progress mixed with its soon-to-be-released USN stablecoin and subsequent DeFi protocols may ultimately enable for Near Protocol with an $11.7 billion market cap to catch as much as and ultimately eclipse Terra, which has a market cap of $37.2 billion.
“This will lead to a comparison of Near to Terra ($LUNA) as the narrative for attractive stablecoin yields proliferates.”