Terra buys $200M in AVAX for reserves
Terraforms Labs (TFL) and the Luna Foundation Guard (LFG) have announced the purchase of AVAX tokens. When combined the buys are worth $200 million.
TFL, the company responsible for the development of the Terra blockchain, bought $100 million worth of Avalanche's native token, AVAX. This was done in order to "strategically allign ecosystem incentives", according to a tweet by Terra.
Furthermore, LFG, a non-profit organization mandated to build reserves for Terra's stablecoin UST, used its own holdings of UST to purchase $100 million worth of AVAX as well.
Do Kwon, founder of Terraform Labs, told Bloomberg:
"Avalanche is still a growing ecosystem - a lot of it is fueled by loyalty to the AVAX token and users feel a lot of affinity with an asset that aligns itself with AVAX... whereas for the average Ethereum user, aligning yourself with Ether doesn't really mean that much."
While Terra continues to strengthen the position of UST, competitors are on the outlook for new ways to get ahead of the stablecoin. Near Protocol (NEAR), a fellow layer 1 competitor, is rumored to be releasing a stablecoin called USN.
USN will reportedly also offer a decentralized finance protocol capable of providing users with a 20% annual percentage yield (APY) on their USN deposits.