Terra added $200 million worth of AVAX tokens to its reserves

The purchased cryptocurrency will be used to collateralize the UST stablecoin

08.04.2022 - 12:30

342

2 min

What’s new? The two companies behind the development of the Terra blockchain, Terraform Labs (TFL) and the Luna Foundation Guard (LFG), announced the acquisition of the Avalanche Foundation’s tokens (AVAX) for a total of $200 million. This purchase should strengthen Terra UST’s stablecoin, which has a market capitalization of $16,7 billion (as of April 8, 2022).

Source: Twitter.com

What do the company’s representatives say? The head of Terraform Labs, Do Kwon, stated that LFG chose AVAX for its UST reserves because of the steady growth of the blockchain ecosystem.

“Avalanche is still a growing ecosystem…a lot of it is fueled by loyalty to the AVAX token,” Kwon claims.

Earlier, the developers of the NEAR Protocol blockchain announced the release of its own stablecoin, which can replace Terra UST.

Announcement of the NEAR Protocol stablecoin

What is Terra? It is a blockchain that allows users to create stablecoins tied to a fiat currency. Each stablecoin created is converted by Terra into its own currency, LUNA.

Author: