Skip to main content

To stabilize UST – Terra commits US$1.1 billion to LFG

 


Do Kwon, the founder and CEO of Terraform Labs, which is responsible for the development of the blockchain ecosystem Terra Luna ( LUNA ) and the associated stablecoin TerraUSD (UST), announced on Friday that Terraform Labs (TFL) has raised a total of 12 million USD LUNA or US$1.1 billion has donated to the Lunda Foundation Guard (LFG). The LFG was formed in January to drive the development of the Terra ecosystem and ensure the sustained effectiveness of its stablecoins. As Kwon explains, the donated LUNA will be burned to mine UST, which in turn will fill the LFG reserves:


“We will continue to add reserves until it is mathematically impossible for any idiots to make claims about UST decoupling.”

The UST is an algorithmic stablecoin that has a theoretical peg of 1:1 to the US dollar. To maintain this ratio, LUNA are exchanged for currency units of the stablecoin. So, if $1 of UST is burned, $1 of LUNA is simultaneously created and vice versa.


However, due to the high demand for UST in decentralized finance projects (DeFi) such as Curve Finance, there are imbalances in the exchange pools for stablecoins. For example: If many crypto investors want to exchange their stablecoins USD Coin ( USDC ) and Tether ( USDT ) for UST, then the reserves of the pool will inevitably shrink, which can lead to unwanted price fluctuations of the (value) stable coins, because the supply lags behind demand.


Two days earlier, TFL had therefore already decided to burn 4.2 million LUNA in order to strengthen the connection of the UST. To that end it was said:


“LFG will exchange (or burn) the relevant LUNA for UST and sell the new UST to the Curve Pool. The profits from this flow back to the LFG to use to purchase BTC.”

Thanks to the Terra-based Anchor Protocol, UST has quickly become one of the most popular stablecoins out there, promising a 20% APR on savings. However, since there is an imbalance between investors and borrowers, the Protocol's reserves are shrinking (because it has to pay out the accrued interest income. This is why the Anchor Protocol recently received massive financial injections from Terra.

My Top Picks
Honeygain - Passive earner that pays in BTC or PayPal
MandalaExchange -The Best no KYC crypto Exchange! 
BetFury - Play And Earn BFG for daily Bitcoin and ETH dividends!
Pipeflare - Faucet that pays in ZCash and Matic, Games pay in DAI
Womplay - Mobile dApp gaming platform that rewards in EOS and Bitcoin
Cointiply - The #1 Crypto Earning Site
Torum - Join the latest Social Network and earn TRM for Free! 
LiteCoinPay - The #1 FaucetPay earner for Litecoin 
LBRY/Odysee - YouTube Alternative that lets you earn Money by viewing videos!
FaucetPay - The #1 Microwallet Platform
FREEBTC - The #1 FaucetPay earner for Satoshi's
FaucetCrypto - An earning/faucet site that pays out instantly
FireFaucet - An earning site that pays better for some than Cointiply
DogeFaucet - Dogecoin Faucet
xFaucet - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BCH, BNB, ZEC, FEY - Claim every 5 minutes
Konstantinova - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BNB, ZEC, USDT, FEY, 25 Claims Daily

Comments

Post a Comment

Popular posts from this blog

The 5 largest platforms for non-fungible token (NFT) collectibles

  Since the beginning of 2021, non-fungible tokens (NFT) have had no holding back and the sector is setting new records almost every day.  More and more artists, stars and brands are realizing the potential - NFT are well on their way to catapulting the crypto space into the mainstream.  But which collectibles are currently the most popular? What are NFT? NFT are unique tokens that cannot be exchanged one-for-one for an equivalent token.  Any asset that is tokenizable can be an NFT.  This includes, for example, (digital) works of art, trading cards, game items and crypto domains.  Theoretically, however, real estate or securities can also be mapped as NFT. NFTs can be used to transparently map ownership structures on a public blockchain.  This allows them to store value just like real objects, even if additional copies are easy to make.  For example, the original picture of the Mona Lisa is significantly more valuable than a photo, as everyone kno...
11 comments
Read more

CARDALONIA: THE CARDANO METAVERSE OPENS THE GATES!

  Have you ever been to Cardalonia? With these words, the Cardano Metaverse called Cardalonia starts the gates. In this 3D world, developers and users can interact with each other. First of all, users have to create an individual character with which they can move online. After that you can enter one of the worlds built by developers with this character. You can also purchase your own land in the Cardano Metaverse via the marketplaces in Cardalonia . This is secured by Cardano's blockchain technology and therefore offers a relatively secure transfer of ownership. Since these are only digital plots of land, it is not yet entirely clear when the plots of land are purchased whether they can also be sold again in the future. A possible profit cannot be estimated at the moment. In Cardalonia, the cryptocurrency Lonia is used. The maximum amount of tokens in circulation is 100,000,000. The team consists of Alice Sand (Co-Founder), Vasil Air (CTO) and Dustan Water (Fullstack Developer). T...
Post a Comment
Read more

Cardano: This is the vision that founder Charles Hoskinson has

  The Altcoin Cardano has tended to decline in recent weeks.  The Alonzo upgrade was supposed to bring improvements, but it soon turned out to be a disappointment.  Cardano founder Charles Hoskinson presented his vision for the cyber motto in a live Twitter video. • Cardano in the last few months under pressure • Charles Hoskinson explains his Cardano vision via Twitter • Security and privacy at the center The cryptocurrency  Cardano  has had a difficult few months.  While founder Charles Hoskinson's cyber motto has had a strong run in 2021, it has been steadily downhill in recent months.  Cardano is faced with some difficulties.  The so-called Alonzo upgrade went live in mid-September, for which crypto fans had high hopes, but which soon turned out to be a disappointment.  The upgrade should make it possible to use smart contracts on the cryptocurrency as well.  It soon turned out, however, that although these were entered into Cardano,...
Post a Comment
Read more