DeFi token Terra (LUNA) continues to rise. In the past weeks, Bitcoin has also been on the rise, and the recent increase in Bitcoin is said to be related to Terra. It all started with a radical step from Terra founder Do Kwon. Kwon aims to make Bitcoin the reserve currency of the Terra ecosystem. The Luna Foundation, a non-profit organization led by Do Kwon, plans to buy $10 billion worth of Bitcoin.
Currently, the companies that hold the most Bitcoin after Satoshi are MicroStrategy with $ 5.7 billion and Tesla with $ 1.9 billion. If the Luna Foundation buys $10 billion worth of Bitcoin, as Do Kwon said, it will surpass these two firms and have the most Bitcoin after Satoshi.
The Luna Foundation will keep the Bitcoins it will buy in its reserves to keep the UST stable coin 1:1 in balance. The foundation has purchased $1.4 billion worth of Bitcoin since January.
Kwon recently stated that they will own the most Bitcoin after Satoshi.
In the statement made on the official Twitter page of the Luna Foundation, it was stated that the foundation had 30,727 Bitcoins as of April 2, 2022, and its market value was $1.4 billion.
Terra, which is a Cosmos-based blockchain and unique algorithmic stable coins, has the highest interest rate protocols in the DeFi market, such as the Anchor and Mirror protocol.
LUNA, the management and stake token of the Terra ecosystem, continues to grow with each passing week. Similarly, UST, the stable coin of the Terra ecosystem, surpassed DAI last December and is now coveting the throne of MakerDAO.
Both UST and DAI are known as decentralized algorithmic stablecoins. This means, for example, Tether is backed by companies like Tether Limited, USDC is backed by companies like Circle, while UST and DAI are not backed by any company. They are governed entirely by mathematics and algorithms.
The working mechanism of Terra is as follows; Whenever a user mints UST, LUNA is burned in return. While this reduces the supply of LUNA, its price naturally increases. As the demand for UST grows, so does the value of LUNA.