AVAX Shoots 7% As Luna Foundation Guard Adds Avalanche to the UST Reserve
Ethereum Layer-1 competitor Avalanche (AVAX) has received a major boost as the Luna Foundation Guard announced it is adding $100 million in AVAX to its UST reserves.
Following the news, AVAX is trading 7% up at a price of $88 as the tenth-largest cryptocurrency with a market cap of $23 billion. This also makes Avalanche (AVAX) the first major cryptocurrency beyond Bitcoin to be added to the UST reserve.
The Singapore-based non-profit organization – Luna Foundation Guard – has pledged to buy $10 billion worth of Bitcoin (BTC) as UST reserves. Of which, it has already acquired $1.7 billion worth of BTC. This new purchase of Avalanche (AVAX) comes as a major diversifying strategy for Terra.
Do Kwon, founder of Terraform Labs, said the Luna Foundation Guard chose Avalanche as a UST reserve because of its rapid growth and wider fan base. Speaking to Bloomberg, Kwon said:
“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.”
What Does It mean for Avalanche?
Unlike LFG’s Bitcoin reserve which rests on the Terra blockchain, the AVAX reserves will rest on the Avalanche blockchain. In the future, several applications on the Terra blockchain will also launch a version for the Avalanche blockchain.
Furthermore, this strategic partnership will also allow Avalanche users to trade UST against Avalanche tokens directly on the avalanche blockchain.
Emin Gün Sirer, CEO of The Ava Labs, Avalanche’s developer said Terra’s ability to scale stablecoins is one of the key reasons behind drawing Avalanche to its platform. He added:
“I wish that more and more coins would look for ways to grow the crypto space as opposed to compete for the same set of people”.
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