The blockchain company behind Terra, Terraform Labs, will provide funding of 50 million LUNA (over $4 billion) to the newly formed non-profit Luna Foundation Guard (LFG). The latter will focus on developing the project’s ecosystem and increasing the resilience of the Terra USD (UST) stablecoin.
1/ The first step towards {REDACTED} is now complete.
Introducing the formation of the Luna Foundation Guard (LFG).https://t.co/oqke82OUB2 pic.twitter.com/QKGwrhmtMH
— Terra (UST) 🌍 Powered by LUNA 🌕 (@terra_money) January 20, 2022
LFG is governed by an independent board of governors, which includes industry experts and leaders of cryptocurrency companies, including Terraform Labs chief executive Do Kwon. In the future, other participants from the Terra ecosystem will join the organisation.
«The primary objective of the LFG is to ensure the stability of the UST peg and to contribute to the development of Terra’s ecosystem. Building reserves to back the peg of algorithmic stablecoins in volatile conditions, as well as funding research that fosters further development of these assets», — the statement said.
The organisation will also provide grants to developers, researchers and community participants who ‘bring to life the boldest ideas in Terra’s economy’. Applicants are divided into three categories:
- development of open-source technologies;
- research and education;
- community development.
Terraform Labs will transfer 50 million LUNA to LFG as initial funding. The transaction is expected to be initiated on 22 January. Its hash will be published publicly to ensure transparency of the process.
Total value locked (TVL) in Terra DeFi apps reached $18.64 billion, according to DeFi Llama. The blockchain protocol ranks second among the largest ecosystems by TVL, behind only Ethereum.
The market capitalization of the UST stablecoin over the past 12 months has risen by more than 5,000%, reaching $10.86 billion, according to CoinGecko.
Back in July 2021, Terraform Labs raised $150 million from several major investors, including Arrington XRP Capital, Pantera Capital, Galaxy Digital and BlockTower Capital.
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