Do Kwon (Terra founder) hinted that $3 billion of bitcoin could be purchased in future to supplement the reserve of the protocol’s reserves. He shared this information with Udi Wertheimer, a bitcoin enthusiast. Do Kwon also explained in the Space the new mechanisms that Terra’s ecosystem has created to allow bitcoin to be used as collateral for its decentralized stablecoin, UST.
Do Kwon directs Terra Ecosystem’s Bitcoin Project
Do Kwon is the founder of Terraform Labs. He made several important announcements on the future Terra ecosystem and Terraform tokens via Twitter. SpaceUdi Valueheimer hosts the event. Udi Wertheimer hosted the event. Kwon stated that Terra plans to bring a tokenized form of bitcoin to Terra’s blockchain in the decentralisedest form.
Kwon explained also that UST will become a hybrid stablecoin with bitcoin. Users can exchange 1 UST worth for $0.99 of BTC. Users would be able to exchange UST for a premium 1% in order to redeem BTC. This is similar to how LUNA works right now. Kwon said that this mechanism will be described in greater detail in the future.
Kwon answered a question about Terra’s decision to use bitcoin as a reserve currency.
I mean a couple of reasons here, but put simply, bitcoin is the only hard reserve asset that’s been proven out of the digital currencies… It is very difficult for somebody in crypto to question bitcoin.
Bitcoin Explosion
Kwon believes that the Terra tokenized bitcoin will become the reserve currency de facto for many protocols. It could also be used in smart contracts to expand to include any treasury. Kwon gave some figures regarding how much bitcoin Terra will buy in the near future. Terraform Labs CEO, Kwon stated that the company can buy bitcoin worth $3 billion in the near future and added that the majority of the bitcoin is still not purchased.
Do Kwon ended by saying that, via the Luna Foundation Guard the protocol plans to be a regular purchaser of bitcoin for this purpose.
What do you think about the announcements made by Do Kwon in Udi Wertheimer’s Space? Please leave your comments below.
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