Luna Foundation Guard, a new decentralized organization developed to support the Luna ecosystem, was launched in Singapore last week. The organization will offer funding in the form of grants to support initiatives built on top of the Luna Network. One of its biggest tasks will be to establish a “foreign exchange reserve” that will help UST, the Luna ecosystem’s partner stablecoin, maintain its peg.
Luna Foundation Guard launched to support the Terra ecosystem
Luna Foundation Guard, a non-profit organization launched To help support and maintain the Terra ecosystem as a decentralized counterpart to TerraForm Labs, the company behind UST Currency. The organization will have various functions, including promoting the ecosystem and also direct funding of various programs through grants, which will be given through its website from January 31.
Do Kwon, co-founder of TerraForm Labs, announced the new initiative via Twitter, Information Followers say the company donated 50 million luna, worth $4 billion, to the initiative. The organization will be formed in Singapore and overseen by a group of founders and leaders, including Do Kwon, Nicolas Platias, Kanav Karia, Remi Tetot, Jonathan Carras, Jose Maria Delgado and Bill Chin.
UST Sustainability Main Goals
The Foundation will also work to maintain the peg of the UST stablecoin against the US Dollar. In this sense, Kwon Having said This will work on social media:
First, creating a decentralized foreign exchange reserve against which UST can be redeemed during currency contraction. It will work towards the repository to be decentralized and operate on-chain.
UST, unlike similar stablecoins that have value collateralized, works by maintaining a balance between the two assets in the Terra ecosystem. This could affect the pegging of the currency against the dollar if the market does not have enough incentives to make profits through the arbitrage of the UST and LUNA. The purpose of establishing this organization is to avoid such a situation.
The UST stablecoin has grown significantly with LUNA, the core asset of the Terra ecosystem, now ranked 9th cryptocurrency by market cap. Similarly, DAI has reached a market capitalization of over $11 billion, surpassing its Ethereum-based counterpart, as the decentralized stablecoin project with the highest value in the UST market.
What do you think about the Luna Foundation Guard setting up to protect UST’s stablecoin peg system? Tell us in the comments section below.
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