Public blockchain Terra (LUNA) is buying $100 million worth of Avalanche (AVAX) tokens to boost its Terra USD (UST) stablecoin reserves.
Terra says that the agreement between Luna Foundation Guard (LFG), the non-profit organization built to support Terra, and the Avalanche Foundation for the over-the-counter sale of AVAX will make the crypto asset the second UST reserve after Bitcoin (BTC).
2/ The @LFG_org’s OTC deal to add $100 million of $AVAX to the $UST Reserve makes AVAX the first major crypto-asset besides $BTC to be added to the UST Reserve, marking the beginning of a diversified and non-correlated asset pool supporting the $UST peg.
— Terra (UST)
Powered by LUNA
(@terra_money) April 7, 2022
The deal will allow Avalanche users to directly trade UST for AVAX on-chain. Native applications on the Terra blockchain will also launch native versions on Avalanche.
“The partnership will also provide distinct benefits to the Avalanche ecosystem at large, by connecting the LUNAtics & Terra builders with the vibrant Avalanche ecosystem, ushering in an immersive cross-chain experience.
On the heels of the xAnchor implementation on Avalanche, several more Terra-native DeFi protocols are also under consideration for a cross-chain expansion to Avalanche, including some that the LUNAtics are anxiously awaiting ”
The acquisition comes amid Terra’s plan to back its main stablecoin with a pool of diversified and non-correlated assets.
“Both the LFG’s inclusion of $100 million of AVAX to the UST Reserve and the $100 million Treasury Swap with TFL exhibit the significant advantages of mutual collaboration between layer one communities in crypto.
It’s becoming increasingly evident that mutual collaboration amongst major ecosystems and communities is the optimal path forward to positive-sum outcomes in a budding interchain world.”
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The post Terra (LUNA) Acquiring $100,000,000 of Top Ethereum Competitor After Selecting Bitcoin As Primary Reserve Asset appeared first on The Daily Hodl.
