Tech

Terraform Labs gifts another $880M to Luna Foundation Guard

04/15/2022
Bitcoin Ethereum News

Terra (LUNA) blockchain developer Terraform Labs (TFL) has gifted the Luna Foundation Guard 10 million LUNA worth around $820 million at current prices.

The Luna Foundation Guard (LFG) is a nonprofit organization attached to Terra that is tasked with collateralizing the network’s algorithmic stablecoin Terra USD (UST) to keep it pegged with the U.S. dollar.

Terraform Labs’ latest announcement came via Twitter on April 14, but did not outline what the funds will go towards specifically. However, transaction data from Terra Finder shows that 7.8 million LUNA (roughly $630 million) was promptly transferred out of the LFG’s reserve wallet yesterday.

Given Terra’s recent form, led by founder Do Kwon who has the goal of accruing $10 billion worth of Bitcoin (BTC) to back the UST’s reserves, many expect that some of the funds will go toward building its stash of digital gold. Another portion of LUNA may be burned (a way in which the UST/USD peg is maintained.)

Some additional Avalanche (AVAX) tokens could be on the shopping list as well, considering both TFL and LFG purchased $100 million worth of AVAX last week.

Following Terra’s recent (and ongoing) Bitcoin (BTC) buying spree, which includes the purchase of roughly 2,500 BTC ($100 million) only two days ago, the wallet belonging to LFG has become the 3rd largest hodler of digital gold globally, only tailing behind MicroStrategy and Tesla.

The latest donation to the LFG comes just over a month since TFL gifted $1.1 billion worth of LUNA so that it could be burnt to mint UST and grow its reserves.

According to the LFG’s accounting records, its total reserve balance stands at $2.44 billion at the time of writing, with BTC representing around 70% of that figure at $1.71 billion.

Related: Terra price key support level breaks after 30% weekly drop — more pain for LUNA ahead?

Despite all of the bullish developments with Terra of late, the price of LUNA is down 7% over the last 30 days to sit at $81.65 at the time of writing.