The native cryptocurrency of the DeFi-centric Layer 1 blockchain system Terra, LUNA, has skyrocketed in the last 24 hours to a new record high of roughly $110, owing to the larger crypto market revival and the Luna Foundation Guard’s (LFG) bitcoin acquisition frenzy.
LUNA is on a roll. The rapidly-growing coin has risen by more than 10% to $109.66 for the first time today, smashing the previous record of $104.73. With a market worth of $38.5 billion, LUNA is now the world’s eighth-most valuable cryptocurrency.
It has now retraced significantly, settling at roughly $108.37 at the time of publication. However, it is still up 8.7 percent for the day. Given that it was selling at roughly $70 at the start of the month, this is a big achievement.
Terra is a cryptocurrency network that was created with the Cosmos software development kit (SDK). Due to the Luna Foundation Guard (LFG), a Singapore-based NGO, acquiring bitcoin to support Terra’s flagship stablecoin UST, the project has received a lot of attention recently. The LFG acquired a further $135 million in BTC in four batches on Monday.
Terra has been a regular bitcoin shopper. Do Kwon, the CEO of LFG and Terraform Labs, acknowledged to Bloomberg on Monday that the corporation has purchased more than $1 billion in Bitcoin since the end of January.
At the time of writing, the Luna Foundation Guard’s bitcoin address had 27,784.96954740 BTC, which is equivalent to $1.32 billion at current market values.
To maintain its algorithmic stablecoin UST linked to the US dollar, Terra employs a dual token method. This implies that for every new UST issued, Terra users must burn $1 worth of LUNA. Without sufficient collateral support, the stablecoin risks collapsing. This is why LFG is putting BTC into its reserve fund.
Kwon stated earlier this month that they are particularly interested in Bitcoin because they believe it is the most powerful digital reserve asset. UST will be the first internet native currency to incorporate the Bitcoin standard into its monetary policy.
The idea, according to the Korean entrepreneur, is to increase LFG’s Bitcoin reserves to $3 billion, with a long-term goal of creating a $10 billion fund. As LFG continues to acquire bitcoin, LUNA is expected to continue soaring higher.