Luna Foundation Guard will Purchase $100 Million of AVAX to Stablecoin Reserves

Luna foundation guard (LFG), a non-profit organization based in Singapore, established reserves for the stable currency Terra (UST). It had previously announced that it had purchased US $231 million of bitcoin to increase its ust reserves. After announcing its decision to accumulate $100 million worth of AVAX for its stable currency reserves, Luna foundation plans to buy different currencies for the first time.

“Welcome $AVAX as the second largest tier 1 cryptocurrency asset after $BTC and become part of the $UST reserve.” LFG wrote on Twitter: “the addition of @avalancheavax’s native token marks the beginning of a diversified tier 1 cryptocurrency asset pool and helps support the linkage of $UST.”

Effect of AVAX

Terraform labs (TFL), a company supporting Terra blockchain, also triggered a $100 million token swap from Luna to AVAX. According to the company, this is to strategically adjust the incentive mechanism of the ecosystem. As far as the current situation is concerned, LFG has added bitcoin worth more than $1.6 billion to its Terra UST reserves. In addition, do Kwon, co-founder of Terra, also revealed that they plan to buy bitcoin worth $10 billion to improve its treasury. LFG has been buying cryptocurrency recently because Jon Wu, President of AVA labs, believes that the addition of AVAX is a good supplement to bitcoin in its treasury.

“AVAX is an excellent reserve asset that can supplement bitcoin  in LFG Treasury. This is just the beginning of the two communities together. We will see more assets, applications and novel subnet cooperation flourish in this new connection,”  Wu Qiang said.

This move means that users will be able to trade UST and avalanche tokens directly on the avalanche blockchain. At the same time, these two transactions mean that the avalanche foundation holds US $100 million worth of UST and  $100 million worth of Luna.

The Partnership

Emin Gün Sirer , founder of avalanche, predicts that these partnerships will become a good catalyst to promote the expansion of native applications on Terra to the avalanche network.

“I hope more and more coins will find ways to develop cryptocurrency space, rather than competing for the same group of people.” he added.

AVAX responded positively to the news, with prices up 4.3% in the past 24 hours and trading at $89 per coin. With a market value of $23 billion, it currently ranks 10th in the coinmarketcap rankings. Luna is Terra’s native token, also traded at $103, with a market value of $36 billion.

Avalanche has proposed several deals to ensure that its network competes at the highest level. At the end of last year, it was reported that avalanche cooperated with insurance token to ensure its cryptocurrency assets.