Terra Ecosystem Announces Luna Foundation Guard to Safeguard Its Stablecoins From Volatility


TerraForm Labs, the company behind the Terra blockchain, has launched a non-profit organization that the company likes to call the Luna Foundation Guard (LFG) to support the Terra ecosystem and the stability and adoption of its most popular stablecoin – UST. Protects taking. The new nonprofit will emphasize several key pillars that they see as core in moving the ecosystem forward and building on why Terra’s LUNA token is able to cushion losses in the current bearish crypto market .

The newly formed foundation will serve as a mechanism for driving engagement and adoption of TerraForm Lab’s growing stablecoin, UST. There has been continued adoption of UST as a token, largely seen as one of the most decentralized yet mainstream stablecoin options currently available, with a market capitalization of $11 billion (about Rs 81,800 crore).

Do Kwon, the founder and CEO of TerraForm Labs, will lead the charge for Luna Foundation Guard, along with founding member Nicolas Platias and several Governing Council members. Starting at the end of the month, the team will deploy foundation grants to blockchain projects across the ecosystem that address open-source development, research and education, and community development within the Terra Network.

How does the Terra Blockchain absorb volatility?

The Terra blockchain consists of an array of stablecoins, a cryptocurrency designed to track the price of fiat currencies. For example, the TeraUSD token is tied to the price of the US dollar, and the TeraEur token is tied to the price of the Euro. All of these stablecoins, and more, have been able to maintain their value due to LunaA token on the Terra blockchain that is specifically designed to absorb volatility.

Like any asset, the price of each stablecoin fluctuates based on supply and demand. This means that due to increase in demand for TeraUSD, its price may exceed $1 (approximately Rs.75). To solve that problem, the protocol encourages LUNA token holders to convert LUNA to TeraUSD, thereby increasing the supply (and lowering the price) of TeraUSD. This works because $1 (about Rs 75) worth of LUNA can always be used to buy one TeraUSD token, even if that token is currently worth $1.01 (about Rs 75).

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Shomick is a Senior Sub-Editor at Gadgets 360. As someone who has been examining the consumer tech space for the past four years, he has now focused on the crypto-verse. When currency values ​​aren’t turning in his head, you can find him in an intense five-a-side football match or grind the latest Destiny 2 weekly challenge on your Xbox. You can contact him at [email protected] for suggestions or inquiries.

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