The Terra blockchain has set the lofty goal of solidifying the status of its core innovation, algorithmic stablecoins. Do Kwon, the founder of Terra, has stated that the blockchain is aiming to become the single biggest holder of Bitcoin, even bigger than Satoshi Nakamoto.
Terra is aiming to make UST “too big to fail”
Kwon shared this during an interview with Sarah Guo, the host of Fungible Times. He emphasized that Terra’s UST Bitcoin reserve target remains at $10 billion.
Shedding light on what is promoting the move, Kwon revealed that he considers algorithmic stablecoins to be the only way of creating an “internet native currency.”
Stablecoins are already serving a key role in the crypto market, he said, highlighting that over 80% of spot trading volume happens through stablecoin co-pairs. He adds that in the DeFi realm as well, liquidity pools are often quoted in stablecoins.
This is why algorithmic stablecoins have a strong likelihood of success, Kwon notes. The odds for success are also likely to shoot up significantly by backing Terra USD (UST) with Bitcoin, “the hardest currency known to man.”
The reason why I want to get to $10 billion is that besides Satoshi, we would be the largest holder of Bitcoin in the world… In that case, the failure of UST is equivalent to the failure of crypto itself, Kwon enunciated.
Adding that making UST too big to fail was the main objective of building the massive Bitcoin reserve. Terra has disclosed that it had already built a reserve ratio of about 20%, having purchased around $1 billion worth of Bitcoin recently and aiming to get to $3 billion.
On-chain data suggests that Luna Foundation Guard (LFG), which has been making the Bitcoin purchases, may be poised to buy another tranche. LFG’s wallet received about $139 million USDT. LFG purchased $135 million worth of Bitcoin earlier this week.
LUNA and Bitcoin soaring in price
The price of LUNA, the native token of the Terra blockchain, has been rising on the back of the connection with Bitcoin. LUNA is up 45.4% in the last month per data from CryptoRank. The token set a new all-time high of $109 just yesterday but is currently trading at $106.
Similarly, Bitcoin has grown 23.7% month to date. BTC is currently trading at around $47,300, down 0.64% in the last 24 hours.
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