LUNA’s gains appear to be spurred by the news of the Luna Foundation Guard (LFG), a non-profit organization supporting the Terra network, raising $1 billion through a token sale led by Singapore-based hedge fund manager Three Arrows Capital.
According to LFG, the funds will be used to create a Bitcoin-denominated UST Forex Reserve, a financial vehicle described as “a release valve” for the redemptions of Terra’s UST stablecoin into LUNA.
In other words, LFG will be able to use the Bitcoin reserves to stabilize the market in cases of sell-offs, with Nicholas Platias, founder of Chronos Finance, claiming that “with the UST Forex Reserve, the primary counter-argument for the sustainability of algorithmic stablecoins is eliminated.”
Avalanche breaks into Top 10
Meanwhile, Avalanche (AVAX) has also seen some strong performance in the last day, flipping the Binance USD (BUSD) stablecoin to become the 10th largest digital currency by market cap.