Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
The two main organizations behind the development of the Terra blockchain have purchased a combined $200M in AVAX, while Near Protocol is rumored to release a new stablecoin.
Terraform Labs (TFL) and the Luna Foundation Guard (LFG) have announced they have purchased a combined $200 million worth of Avalanche (AVAX) tokens from the Avalanche Foundation.Ā
TFL, the company responsible for the development of the Terra blockchain, swapped $100 million worth of Terra (LUNA) for AVAX in order to āstrategically align ecosystem incentives,ā according to Terraās Twitter.
LFG, a nonprofit organization mandated to build reserves for Terraās algorithmic stablecoin TerraUSD (UST), used its own holdings of UST to purchase an additional $100 million worth of AVAX from the Avalanche Foundation.
These purchases are meant to reinforce the stability of Terraās native stablecoin, which currently has a market cap of $16.7 billion.
Do Kwon, the founder of Terraform Labs, told Bloomberg that LFG selected AVAX for its UST reserves because of solid growth in the blockchainās ecosystem as well as the stark loyalty of its users.
āAvalanche is still a growing ecosystem ā a lot of it is fueled by loyalty to the AVAX token and users feel a lot of affinity with an asset that aligns itself with AVAX [ā¦] whereas for the average Ethereum user, aligning yourself with Ether doesnāt really mean that much.ā
As Terra continues to strengthen the position of UST, competitors are looking for new ways to dethrone the stablecoin. Near Protocol, a layer-1 blockchain and competitor to both Ethereum and Terra, is rumored to be releasing a stablecoin called USN which will reportedly also offer a decentralized finance (DeFi) protocol capable of providing users with a 20% annual percentage yield (APY) on their USN deposits.
This is similar to the Terra ecosystemās Anchor protocol, which currently offers users a 19.49% APY on UST deposits.
In a Substack post detailing what he understands of the plans, Crypto Insiders Telegram group founder Zoran Kole argued that Near Protocol was superior to both Ethereum and Terra, offering data from Electric Capital that outlined Near Protocolās substantial growth in terms of development.
Kole concluded that Near Protocolās network growth combined with its soon-to-be-released USN stablecoin and subsequent DeFi protocols could eventually allow an $11.7 billion market capitalization to catch up to and eventually eclipse Terra, which has a market cap of $37.2 billion.
āThis will lead to a comparison of Near to Terra ($LUNA) as the narrative for attractive stablecoin yields proliferates.ā
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.