Terra Acquires $200 Million Worth of AVAX for Reserve Purpose as Alternative Stablecoins Arise

The two primary groups responsible for Terra’s creation have invested a cumulative $200 million in Avalanche’s native token, AVAX, whereas Near Protocol is said to be launching a novel stablecoin.

Terra Purchases $200M Worth of AVAX 

People who work for Terraform Labs and Luna Foundation Guard say they have bought $200M worth of the Avalanche tokens out from Avalanche Foundation, which makes them. As part of a plan to tactically synchronize environmental rewards, Terraform Labs, the corporation behind the Terra blockchain, exchanged $100M worth of Terra’s local coin, LUNA, in return for the AVAX coins, which are worth more money.

Luna Foundation Guard, a non-profit company tasked with establishing reserves for Terra’s analytic stablecoin UST, utilized its native UST holdings to acquire an added $100M in Avalanche’s native token from the Avalanche Foundation.

There is approximately $16.7B worth of UST stablecoins in circulation, and these transactions are designed to help keep the value of the currency stable. An expert in blockchain technology has revealed to Bloomberg that Luna Foundation Guard chose the Avalanche native token for its stablecoin (UST) reserves due to the blockchain’s growing community and its user base’s unwavering commitment.

Avalanche remains a developing community; most of it is powered by the Avalanche native token loyalty. Consumers have a strong affection for an investment aligned with the Avalanche token. In contrast, for the ordinary Ethereum user, identifying with Ether is a very meaningless act of support.

Terra Rivals Seeking Strategies For Its Dethronement 

Different strategies of dethroning the stablecoin are being sought by rivals as Terra continues its rise. Although it’s not confirmed yet, an L1 blockchain dubbed Near Protocol (NEAR), which would be a direct rival to Terra and ETH, is thought to be working on releasing USN. This stablecoin would guarantee users a 20 percent APY on their USN investments. It is analogous to the Anchor mechanism in the Terra community, which currently pays a 19.49 percent Annual Percentage Yield on UST deposits.

Cryptocurrency Insiders Telegram group creator Zoran Kole stated that the Near protocol was stronger than Terra and Ethereum combined in a Substack article explaining what he knows of the schemes, citing statistics from the Electric Capital that detailed the Near protocol’s tremendous rise with regards to development.

Kole stated that Near Protocol’s network development, together with its soon-to-be-launched USN stablecoin and following Decentralized Finance protocols, might ultimately enable it to gain ground to and likely dominate Terra, which possesses a current valuation of $37.2B. Near ($NEAR) and Terra ($LUNA) would be compared as the story about stablecoins with good yields spreads.

Leave a comment