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This initiative means that users will be able to directly trade UST against the Avalanche tokens on the Avalanche blockchain.
Luna Foundation Guard (LFG), a Singapore-based nonprofit building reserves for the stablecoin Terra (UST) previously announced that it had purchased $231 million in Bitcoin to boost its UST reserves. For the first time, Luna Foundation plans on buying into a different currency after announcing its decision to pile up $100 million worth of AVAX for its stablecoin reserves.
“Welcoming $AVAX as the second major layer one crypto asset next to $BTC as part of the $UST Reserve. The inclusion of @avalancheavax’s native token marks the start of a diverse pool of layer one crypto assets helping support the $UST peg,” LFG tweeted.
Terraform Labs (TFL), a company supporting the Terra blockchain also triggered a token swap of $100 million from Luna to AVAX. According to the company, this is to strategically align ecosystem incentives. As it stands, LFG has added over $1.6 billion worth of Bitcoin to its Terra UST reserves. Also, the co-founder of Terra Do Kwon has disclosed their plan to purchase $10 billion worth of Bitcoin to boost its treasury. LFG has recently been purchasing cryptos as Ava Labs President Jon Wu believes that the addition of AVAX is a good complement to Bitcoin in its treasury.
“AVAX is an excellent reserve asset to complement bitcoin [BTC] in the LFG treasury. This is just the beginning for these two communities together. We’ll see more assets, applications, and novel subnet collaborations flourish out of this new connection,” said Jon Wu.
This initiative means that users will be able to directly trade UST against the Avalanche tokens on the Avalanche blockchain. Also, these two deals mean Avalanche Foundation holds $100 million worth of UST and $100 million worth of Luna.
Avalanche founder Emin Gün Sirer expects that these partnerships will be a good catalyst in driving native applications on Terra to expand onto the Avalanche network.
“I wish that more and more coins would look for ways to grow the crypto space as opposed to competing for the same set of people,” he added.
AVAX has reacted positively to the news with a 4.3 percent price surge in the last 24 hours to trade at $89 per coin. With a market cap of $23 billion, it is currently ranked 10th on the CoinMarketCap ranking. Luna, the native token of Terra, is also trading at $103 with a market cap of $36 billion.
Avalanche has come up with several deals to ensure its network competes at the highest level. Late last year, it was reported that Avalanche had partnered with Insure Token to ensure its crypto assets.