Last week, the Luna Foundation Guard was launched in Singapore. It is a decentralized organisation that supports the Luna ecosystem. It will grant funding to help initiatives that are built upon the Luna network. One of its biggest functions will be to establish a “forex reserve” that will aid UST, the companion stablecoin of the Luna ecosystem, to maintain its peg.
Luna Foundation Guard Launches Terra Ecosystem Support
Luna Foundation Guard is an organization that does not profit. launchedTo support the Terra ecosystem and act as a decentralized counterpart to Terraform Labs (the company behind the UST money), to maintain it. It will serve a variety of functions including promotion of the ecosystem as well as direct financing of various programs through grants. This will happen through its website, which will go live on January 31st.
Do Kwon is the co-founder and CEO of Terraform Labs. He announced this initiative via Twitter. informing It was revealed that the company donated $50 million worth of LUNA to the cause. Do Kwon will set up the organisation in Singapore. A group of leaders and founders including Nicholas Platias (Kanav Kariya), Remi Tetot. Jonathan Caras. Jose Maria Delgado. and Bill Chin, will supervise it.
The Main Goal of UST Stability
It will be able to keep the peg of UST to the U.S. Dollar. Kwon is referring to this. statedOn social media, it will lead to:
First, creating a forex decentralized reserve that $UST can redeem during currency contractions. This will allow for decentralized and open-source currency reserves.
UST works differently to other stablecoins that are collateralized in their value. It maintains an equilibrium between the Terra ecosystem’s two assets. If there is not enough incentive in the market for arbitrage of UST or Luna, this could affect the dollar peg. This is why this organisation was established.
The UST stablecoin’s value has increased tremendously with LUNA. This native asset is part of Terra, making it the ninth most popular cryptocurrency. UST also reached a more than $11 million market capitalization, surpassing DAI (its Ethereum-based counterpart) to become the largest decentralized stablecoin in the marketplace.
What do you think about the establishment of the Luna Foundation Guard to protect UST’s stablecoin peg system? Leave a comment below.
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