Terra Founder Hints at $3 Billion BTC Purchase, Explains New Bitcoin-Linked Tokenomics

Terra Founder Hints at $3 Billion BTC Purchase, Explains New Bitcoin-Linked Tokenomics

Terra founder Do Kwon hinted at a future purchase of $3 billion worth of bitcoin to supply the reserves of the protocol in a recent Twitter Space shared with bitcoin enthusiast Udi Wertheimer. In the same Space, Do Kwon explained the new mechanics that the Terra ecosystem is introducing in order to use bitcoin as collateral for its flagship decentralized stablecoin, UST. Do Kwon Directs the Terra Ecosystem to Bitcoin

Do Kwon, founder of Terra and Terraform Labs, made some important announcements regarding the future of the Terra ecosystem and its tokens in a Twitter Space hosted by Udi Wertheimer. One of these announcements has to do with the inclusion of new token mechanics that take into consideration some form of bitcoin in the Terra ecosystem. In this regard, Kwon announced Terra is working toward bringing a form of tokenized bitcoin to the Terra blockchain in the most decentralized form possible.

Kwon also explained that with the inclusion of bitcoin, UST would become a hybrid stablecoin, allowing users to exchange $1 worth of UST for $0.99 worth of BTC. This would effectively allow users to redeem BTC by using UST for a premium of 1%, almost in the same way that LUNA is being used right now. Kwon clarified that these mechanics will be explained in the near future in a more detailed way.

When asked about why Terra chose bitcoin as a reserve asset, Kwon stated:

I mean a couple of reasons here, but put simply, bitcoin is the only hard reserve asset that’s been proven out of the digital currencies… It is very difficult for somebody in crypto to question bitcoin. Bitcoin Explosion

Kwon expects this new tokenized version of bitcoin in the Terra ecosystem to become the de facto reserve currency of many protocols built on top of the chain, expanding to be part of every smart contract application that holds any treasury. In light of this, Kwon announced some numbers regarding the amount of bitcoin Terra will purchase in the short term. The Terraform Labs CEO stated the company has a budget to buy $3 billion worth of bitcoin in the short term and announced that most of this bitcoin has not been bought yet.

Do Kwon concluded by announcing that the protocol, through the Luna Foundation Guard, plans to become a regular buyer of bitcoin for the aforementioned purpose. Tags in this story Bitcoin, collateral, do kwon, LUNA, Terra, terraform labs, UST

What do you think about the announcements made by Do Kwon in Udi Wertheimer’s Space? Tell us in the comments section below. Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved. $5.8 Billion Burned: Second Largest Crypto Network Records 2 Million Ethereum Destroyed in 7 Months NEWS | 7 hours ago Kenyans Lose Millions of Dollars to yet Another Cryptocurrency Scam: Bitstream Circle NEWS | 1 day ago

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleGrePay and Alchemy Pay Partner to Expand Crypto Payments Next articleBitcoin, Ethereum Technical Analysis: ETH Stays Above $2,900 as Traders Eye $3,000 Ceiling  Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItAptos, Led by Meta"s Ex-Employees, Gets $200 Million to Build a Scalable Blockchain System

Aptos, a new startup created by some of Meta"s former employees involved in the Diem project, has announced it has raised $200 million for its upcoming goal of creating a scalable blockchain system. The investment, conducted in a strategic funding ... read more.Instagram Is Working on Bringing NFTs to the Platform in the "Near Term," Says Meta CEO Mark Zuckerberg RBI Crypto: Indian Government Says Central Bank Has No Plan to Issue Cryptocurrency Elliptic Identifies "Several Hundred Thousand Crypto Addresses" Tied to Russia-Based Sanctioned Actors Kenyans Lost $120 Million to Cryptocurrency Scams in the Past Financial Year — Government Official