Terra’s Do Kwon Reveals Huge Growth Plans With Avalanche After Buying $100M In AVAX.
Terra said on Thursday that it had added to its reserves by purchasing Avalanche (AVAX) tokens worth $100 million in a ‘treasury Swap’ between LUNA and AVAX. AVAX is the first significant cryptocurrency other than bitcoin to find its way into the stablecoin’s reserve as a result of this OTC deal to add the stated AVAX tokens to UST reserves.
The Twitter account said:
“TFL is committed to building & supporting new $UST-native protocols within the Avalanche ecosystem to maximize its cross-chain footprint and has executed the separate $100 million Treasury Swap for AVAX to demonstrate its commitment to Avalanche.”
Terra, whose purchases are backed by The Luna Foundation Guard (LFG), went on to say that the AVAX swap was “the start of a diversified and non-correlated asset pool supporting the $UST peg,” implying that additional cryptocurrencies could be added in the future. The AVAX purchase will assist both ecosystems thrive by integrating the LUNAtics and Terra builders with the lively Avalanche environment, ushering in an immersive cross-chain experience.
The AVAX initiative follows the platform’s continuous acquisition of Bitcoin, which it intends to use to support USDT, the Terra network’s flagship stablecoin and the leading decentralized stablecoin in DeFi by market cap.
Terraform Labs’ Founder and CEO, Do Kwon, believes that cross-chain networks will be the future of blockchain networks, claiming that the alliance between Avalanche and Terra is the largest ever forged in web3. Following the purchase, he tweeted:
“None can deny that avalanche is one of the most exciting ecosystems in web3.”
Terra currently intends to use the AVAX that LFG obtained “to provide a large reserve against $UST using the automated mint mechanism that was designed for $BTC.” As a result, UST will be tied to AVAX, allowing it to be manufactured and redeemed in exchange for the layer 1 coin.
Kwon went on to say that they would start covering “initial bootstrapping costs” for certain projects in the AVAX ecosystem that employ UST, including audit costs. Furthermore, they would be putting Avalanche with their own boots on the ground. “In the Avalanche ecosystem, we will create a cluster of top assets,” Kon said, urging AVAX projects to participate with the Terra community in order to boost growth.
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