Co-founder and chief executive officer of the firm behind the Terra blockchain, Do Kwon, confirmed that there was a further $135 million in BTC purchased on March 28.
Last week, Kwon tweeted that there is a $3 billion fund to seed the reserve backing the stablecoin and the reserve would eventually reach $10 billion. Bitcoin itself has gained almost 16% since that tweet on March 22.
UST is a stablecoin that maintains its peg by minting and burning the LUNA token. It is not backed by fiat but decentralized crypto assets, such as the BTC reserve. This will help it maintain the dollar peg when there is a high demand for redeeming UST.
Speaking to Bloomberg earlier this month, Kwon stated that the reason they are particularly interested in Bitcoin is that it is the strongest digital reserve asset. “UST is going to be the first internet native currency that implements the Bitcoin standard as part of its monetary policy,” he added.
On March 29, 3ac co-founder Zhu Su commented on the narrative and how fast the ecosystem is developing:
“We’re seeing some of the earliest and most ambitious ideas in crypto starting to unfold. Crosschain decentralized stablecoin backed entirely by digitally native assets was the holy grail in 2016,”
Terra has the fourth-largest stablecoin behind Tether (USDT), USD Coin (USDC), and Binance USD (BUSD), with a market capitalization of $16.2 billion. UST supply has grown by 60% since the beginning of 2022.
LUNA hits ATH
Terra’s native token, LUNA, has been boosted by the big Bitcoin purchases. The coin is up 9% on the day and trading at $104 at the time of press according to CoinGecko.
LUNA has made 11% over the past fortnight and 34% over the past month. It hit an all-time high of $105.91 on the morning of March 29, marking a gain of 133% since the end of January when it plunged below $45.