Terra isn’t dead: the network is back up and running on a new blockchain, focusing on a more decentralized governance model. The community is making no attempts to revive its recently failed TerraUSD (UST) stablecoin. It has, however, re-launched a new version of the LUNA governance token, restarting its supply at 1,000,000,000 tokens. Here are the facts on the new blockchain, why it was launched, and the new token’s airdrop/ distribution. Background on Terra 2.0 Terra 2.0 (now known formally…
Terra – the fiat-pegged stablecoin protocol – purchased another $135 million in Bitcoin on Monday to add to its reserves.
This coincides with Bitcoin’s push to $48,000, breaking through the $45,000 that Bitcoin has been under since early January.
- Terra’s purchase is part of its effort to build a $10 billion Bitcoin reserve to back its US dollar stablecoin, TerraUSD (UST).
- UST is currently backed by LUNA. However, it is pivoting to Bitcoin to avoid risks of a future debt spiral, and LUNA’s potential price fluctuation.
- The decision has led to Terra purchasing thousands of Bitcoin per day. In fact, it is paying the BTC with the money from user’s UST purchases in Terra. It now holds over $1 billion in reserves.
- When Bitcoin is bought and removed from exchanges, it reduces the available supply on the market. This is generally thought to lead to higher prices.
- Terra may therefore be contributing to BItcoin’s price appreciation in recent days. In fact, the move has caused Crypto’s Fear and Greed Index to rise to its highest point since Bitcoin’s November high.
If Terra fulfills its mission, it will become a larger holder of BItcoin than MIcroStrategy.