Published: 01.04.2022
Article reading time:
1 minute.
The management of Terraform Labs believes that the algorithmic stablecoin UST, which has become popular, may suffer from a strong depreciation of the first cryptocurrency.
Terraform Labs stores $1.45 billion worth of bitcoins on its wallets. In the near future, the company plans to increase its holdings of bitcoins to the amount of $3 billion. The company’s long-term plans are to purchase $10 billion worth of BTC. Bitcoins should be used as collateral for the UST algorithmic stablecoin, says Terraform Labs Co-Founder and Luna Foundation Guard Director Do Kwon:
“The worst outcome would be that six months after we bought bitcoins, their rate would collapse. Especially if it correlated with a drop in demand for UST, that is, people would sell our stablecoins. But, I can bet that in the long term, bitcoin will grow and our reserves will increase along with the BTC rate. This will allow us to work off the sudden drop in demand for UST.”
Earlier, Do Kwon said that Terraform Labs should have the largest bitcoin wallet.
At the end of February, the non-profit organization Luna Foundation Guard announced the successful completion of the closed sale of LUNA tokens for $1 billion. The funds will be used as a reserve for the UST stablecoin.
Source: Bits
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