Do Kwon, CEO of Terraform Labs, explains that the Luna Foundation Guard (LFG) has increased its Bitcoin (BTC) reserve. Kwon says LFG's BTC reserve will reach $3 billion. The CEO also states that they have a long-term goal of 10 billion dollars. LFG, a nonprofit of Terra (LUNA), aims to use this BTC reserve for Terra's stablecoin, UST.
LFG, a Singapore-based nonprofit running on the Terra blockchain, will use this Bitcoin as a backup asset for TerraUSD (UST), the largest algorithmic stablecoin on their blockchain. Do Kwon states that they have already collected $ 1 billion with the sales of LUNA, while they have collected another $ 1.2 billion by transferring Tether with UST. Kwon adds that there is only $800 million left to the foundation's $3 billion goals.
The foundation's creation of a $10 billion Bitcoin reserve pushes TerraUSD (UST) to a positive course in the long run. Kwon reports that they will also allocate a portion of UST's revenue from the protocol to achieve these goals. In addition, Kwon says that there will be changes in the protocol so that BTC can be used as a reserve in the TerraUSD (UST) protocol. However, Kwon has not yet shared clearly about the updates. Kwon states that the fund is ready, but the technical infrastructure and bridges are not yet ready.
Although there is no clear explanation, experts predict that the TerraUSD (UST) algorithm, which is already connected to the LUNA burning, may change and be fixed to the dollar like other stablecoins. Terra's stablecoin algorithm can be defined by the burning of LUNA, which corresponds to 1 dollar, to 1 UST. Research shows that algorithmic stablecoins like Terra are more fragile due to their unsecured nature. Therefore, Terra's transition to the dollar stable can occur and the related stablecoin can maintain a 1:1 ratio with the dollar.