LUNA Lovers are Mooning: BTC Gets a $135M Boost from Terra Foundation
Terra (LUNA) is skyrocketing these days and even helping fellow cryptocurrency, Bitcoin by purchasing millions to put in UST reserve
What is the Terra (LUNA)?
Founded in 2018, Terra came to life on the blockchain with the intention of more price stability and wide adoption of fiat currencies. Terra’s native token, LUNA, is used to regulate and somehow even stabilize the price of the protocol’s stablecoins.
Just like traditional stock options, LUNA holders are also able to have a say and vote on key determining factors of Terra and its future ventures.
LUNA in the Green
LUNA token has surged these days and even broke above the key resistance level to hit over $109 before fluctuating back down and finding stable ground not far behind. Terra (LUNA) spiked a whopping 12% late hours of Tuesday's trading session, its biggest peak of 2022.
The jump comes after the Terra Foundation, behind the LUNA token, continues to seal the deal on another hefty purchase of BTC for its reserves.
An important factor to one of many reasons why Bitcoin is continuing to soar, even hitting all-time highs in 2022, is the Luna Foundation Gaurd (LFG) and its action toward a Bitcoin reserve. The key psychological level that investors are looking at BTC for is pushing past the 50K mark.
But the real question is, why is Terra buying so much Bitcoin and wanting a reserve?
Well, let's get into why Terra is wanting to build such a hefty reserve of about $10B. The Terra Foundation, behind the LUNA token, is actively accumulating Bitcoin for its reserve called UST. It is good to note that UST and LUNA are mutually dependent on each other and both are correlated to the overall success of the Terra ecosystem. In simple terms, Terra (LUNA), TerraUSD (UST), and the Terra ecosystem are all related and when one is affected, the others are as well.
UST is a type of stablecoin in the Terra ecosystem where a smart contract-based algorithm keeps the price of UST to $1 at all times by burning (permanently destroying) LUNA tokens. This, in turn, allows the creation of minting to UST tokens. I know, complicated right? Well, keep an eye out for more on LUNA and UST at NAGAX as we explain what they are through the NAGAX Academy.
LUNA & BTC at NAGAX
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