Skip to main content

What Happens to Terra When Bitcoin Price Plunges?

 


Terra's reasoning announces what will happen to UST if Bitcoin crashes.


Do known told the Unchain podcast that he believes in Bitcoin's long-term growth and is therefore not concerned about short-term volatility.


The CEO of Terraform Labs has acknowledged that a bitcoin price crash would negatively impact the stability of the UST stablecoin, but he expects bitcoin to keep climbing.


In the podcast, Kwon said:


“The worst case scenario would be if we bought bitcoin and six months later there was a crash correlating to a massive drop in demand for UST,” which he modestly puts it, would be “negative.” However, this scenario doesn't keep him up at night:


I bet the long-term scenario of bitcoin rising and reserves strong enough to withstand a drop in UST demand is the more likely scenario.”

Kwon bought bitcoin to use for Terra's treasury. So far, Terra has acquired 30,727.9 BTC. This makes Terra the third largest single-wallet BTC holder.


One of Kwon's stated goals for Terra's treasury, known as the Luna Foundation Guard (LFG), is to make Terra the largest single-wallet holder of BTC. To outperform MicroStrategy, Terra must own more than 125,051 BTC.


Laura Shin, host of the Unchainted Podcast wrote on Twitter:


According to @stablekwon, @terra_money is a layer 2 solution for BTC where "Bitcoin just needs to be good at being a thing, at being an asset." What do you think – will Terra be Layer 2 for Bitcoin?”


Later in the interview, Kwon said that Terra is a Layer 2 solution for the Bitcoin network. He argued that Bitcoin has a bridge with Terra that allows it to be used across a variety of applications from DAOs to NFTs to DeFi.


"And in terms of expressiveness, transactional capabilities, throughput, all of those things can happen on Terra."


This statement, of course, caused a lot of discussion. Ethereum developer Antiprosynthesis questioned whether the company using BTC to back a stablecoin should be considered a Layer 2 solution.


"Even I don't think bitcoin's standards have dropped that much."

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