Luna Foundation Guard Launches to Support UST Peg as Stablecoin Blows Past $11B Market Cap
Luna Foundation Guard is a non-profit organisation that launched in order to support and maintain Terra’s ecosystem as a decentralized counterpart to Terraform Labs (the company behind the UST currency). The organization will serve a variety of functions, including promotion of the ecosystem as well as direct funding of various programs via grants. This will be available through its website, which will go live on January 31.
Do Kwon, cofounder of Terraform Labs announced the new initiative via Twitter , informing followers about the donation of 50 million LUNA (worth $4 billion) to this initiative. Do Kwon will establish the organization in Singapore. A group of leaders and founders will oversee it, including Nicholas Platias (Kanav Kariya), Remi Tetot and Jonathan Caras. Jose Maria Delgado and Bill Chin.
The Main Goal of UST Stability
The foundation will also maintain the peg between the UST stablecoin and the U.S. dollars. Kwon said via social media that it will work towards this end.
First, creating a decentralized forex reserve that $UST can be redeemed in currency contractions. It will lead to decentralized and onchain reserves.
UST works differently to other stablecoins that are collateralized in their value. It maintains an equilibrium between two assets within the Terra ecosystem. If there aren’t enough incentives on the market to make a profit through the arbitrage of UST or Luna, this could affect the peg against the dollar. This organization was created to prevent such an outcome.
The UST stablecoin is now the 9th most valuable cryptocurrency in terms of market capitalization. LUNA is the Terra ecosystem’s native asset. UST also has surpassed its Ethereum-based counterpart DAI to become the decentralized stablecoin with the highest market value.