Saturday, December 2, 2023

LFG acquires $100 million in AVAX to build reserves of its stablecoin UST.

The Luna Foundation Guard (LFG) has acquired $100 million of AVAX, Avalanche’s native token, to build the reserves of its stablecoin UST. The non-profit organization has a long-term goal of acquiring $10 billion in Bitcoin for UST reserves.

Do Kwon, the CEO of Terraform Labs, confirmed that LFG purchased an additional $231 million bitcoin. This brought its total holdings to more than $2 billion. LFG chose Avalanche’s AVAX over Ethereum or other tokens because industry members regard the Avalanche community as a major draw.

Jordi Alexander, the chief investment officer at Selini Capital, believes LFG chose AVAX because token exchange makes a dent in that ecosystem. It can win over native AVAX users. Moreover, Avalanche’s token market cap is 18 times smaller than ETH’s, thus, it’s a meaningful partnership. Alexander said a $100 million swap is close to 0.5% of AVAX’s market cap, whereas an Ethereum purchase of the same amount would hardly leave a dent. This is a good opportunity to bring new fans and users to UST.

Santiago Santos, an angel investor, sees the stablecoin landscape as less developed in Avalanche. It’s a way to position UST as a “stablecoin of choice”. He believes Ethereum is a more saturated ecosystem. Alexander pointed out that LFG is already on AVAX with Anchor, so it’s a logical next step to solidify the support from a place of strength. He was referring to the Anchor Protocol, which is native to Terra.

Kwon said the community aspect of Avalanche and the users’ loyalty to the native token played a role in LFG’s decision. Emin Gun Sirer, Ava Labs CEO, highlighted that Luna’s acquisition of the $100 million in AVAX is just the beginning of UST’s adoption. Ava Labs teamed up with Aave, Golden Tree Asset Management, Valkyrie Funds, Jump Crypto, Wintermute, and Securitize in March. The collaboration is to build the first KYC-compliant, horizontally-integrated blockchain engineered for institutional DeFi.

The team has launched the Avalanche Multiverse. This is a $290 million program to encourage the growth of its subnet capabilities. It serves to validate blockchains, and enable scalable, app-specific networks. UST is set to benefit from the venture.

Cryptured Team
Cryptured Team
The writers team at is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.

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