The strategy seeks to ensure UST’s parity with the dollar after a price drop the stablecoin a cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency. suffered over the weekend.
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The cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. project Earth is ready to deploy part of its reserves of Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. to ensure that the TerraUSD (UST) stablecoin maintains its parity with the US dollar.
Luna Foundation Guard (LFG), a non-profit organization that supports the Earth announced Monday plans to use USD $1.5 billion in Bitcoin and UST with the aim of ” help protect “UST’s parity with the dollar.
Como tal, el grupo dijo que planea prestar 750 millones de dólares en BTC a empresas que ofrecen comercio extra bursátil (OTC). Luego de esto, y una vez que el mercado se haya estabilizado, buscará obtener un préstamo en UST por la misma cantidad para comprar Bitcoin . LFG said the board voted in favor of the proposal after noting significant volatility a statistical measure of dispersion of returns, measured by using the standard deviation or variance between returns from that same security or market index. in the market.
4/ As a result, the LFG Council has voted to execute the following:
– Loan $750M worth of BTC to OTC oTC, or ‘Over The Counter’ is trading that happens directly between two parties, with no exchanges or trading platforms involved. trading firms to help protect the UST peg.
– Loan 750M UST to accumulate BTC as market an area or arena, online or offline, in which commercial dealings are conducted. conditions normalize.
— LFG | Luna Foundation Guard (@LFG_org) May 9, 2022
It should be noted that UST relies on another token, LUNA, to maintain its 1:1 link to the US dollar through a set of on-chain transactions that are recorded on the blockchain itself and shared with all of the participants are done on-chain. minting and burning destroying a certain number of digital coins to reduce their issue. This method is used to fight inflation and increase the value of cryptocurrency. All token burning transactions are recorded in the blockchain as a transaction. Therefore, anyone can verify that the coins were destroyed. mechanisms. Recently, the project has started buying large amounts of BTC as a way to partially back UST. The goal of Earth is to maintain USD $10 billion of Bitcoin in your reserves.
UST pierde momentáneamente su paridad
The news comes after UST experienced a slight drop over the weekend that caused it to lose its parity with the dollar. As reported by CoinDesk The stablecoin declined to USD $0.987 on Saturday, before recovering on Sunday, and coincided with a drop in LUNA, the native token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. of Earth of 10%. The data from CoinMarketCap reflect the fall.
The disengagement appeared to be due to a series of significant withdrawals from UST on two major decentralized decentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal. finance platforms (DeFi). According to CoinDesk the total deposits of UST inAnchor(UST’s total circulating supply was USD$18 billion).
Large quantities of UST also came out of Curve a DeFi a movement encouraging alternatives to traditional, centralized forms of financial services. protocol the set of rules that define interactions on a network, usually involving consensus, transaction validation, and network participation on a blockchain. that offers token exchange. The events coincided with the movement of a wallet a place where cryptocurrency users can store, send and receive digital assets. that offloaded USD $84 million in UST on Ethereum a decentralized open-source blockchain with smart contracts functionality. y USD $108 millones en Binance according to the media. The coincidence sparked rumors among the community about a “ coordinated attack “to unlink UST to the dollar.
While this weekend’s firing was not the first (nor the largest) in the history of Earth as pointed out by CoinDesk This kind of fluctuations are not ideal for a stablecoin. As of press time, UST is trading at USD $0.99.
Terra will continue to hold Bitcoin for the long a situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later. term
The founder of Earth y CEO de Terraform Labs Do Kwon, came to Twitter to explain to the community some of the details of the route to be followed. While initially bromo about UST’s disengagement amidst the conspiracy rumors, he assured this Monday that Earth is not looking to dispose of its stockpile of Bitcoin .
Instead, LFG’s plan approved by the board is to use a small percentage of its capital capital is most commonly defined as the large sum of money you would use to invest. in BTC to buy UST if the asset continues to fall below its parity, and sell UST to buy BTC if the stablecoin rises or remains equal to the dollar. Kwon added that this move seeks to address a place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers. the most recent concerns surrounding UST and argued that the plan to Earth continues to be to maintain Bitcoin long-term.
While UST’s purchases and sales are not significantly directional now, we felt it was valuable to have capital ready to deploy in the current market. As the markets recover, we plan to redeem the loan in BTC, increasing the size of our total reserves.
The reserves of Bitcoin de Earth had risen to USD $3.5 billion after a final purchase last Thursday, after which it surpassed the $3 billion short-term target.
As of press time, the price of Bitcoin has pulled back considerably amid a broader correction a correction is a pullback of an asset’s price of at least 10% to adjust for over-valuation. within the cryptocurrency market. The flagship asset is trading around USD $32,900. Meanwhile, LUNA, a native of Earth has also dropped about 5% in the last 24 hours and remains at the $59 level.
- Not only Bitcoin: Terra buys USD $200 million in Avalanche to back its stablecoin
- Terra bought more than 4,000 bitcoins for USD $170 million over the weekend and plans to diversify Solana
- Terra founder bets more than USD $10 million that LUNA will go up in the next year
Article by Hannah Estefania Perez / DiarioBitcoin
Image from Unsplash edited in Canva
