Nonprofit Raises $1B To Create Bitcoin Reserve, Support Terra Ecosystem Growth

A nonprofit working to scale the ecosystem of the Terra blockchain has raised $1 billion in a private token sale.

With the funding, the Luna Foundation Guard (LFG) plans to establish a bitcoin reserve for Terra’s UST stablecoin.

“The UST Forex Reserve is an initiative to provide a further layer of support using assets that are considered less correlated to the Terra ecosystem, initially with Bitcoin but with plans to expand to other major non-correlated assets within the market moving forward,” the foundation said in a statement.

Jump Crypto and Three Arrows Capital led the token sale, with participation from DeFiance Capital, GSR, Republic Capital, Tribe Capital and others.

The raise is one of the largest to date in crypto, next to NYDIG’s $1 billion funding round, which raised its valuation above $7 billion in December.

Terra, a fast-growing blockchain, now supports more than 70 projects.

As an algorithmic stablecoin, UST is pegged to a series of financial aspects within the Terra protocol, which leads to moves above or below $1. LUNA — Terra’s reserve, staking and governance asset — retains an elastic supply to help neutralize market pressures.

“[It’s] $1B to absorb liquidity crunches,” Kanav Kariya, president of Jump Crypto, tweeted. “All contractions in the economy have caused reflexive movement (by design). Allowing for a big chunk of withdrawals in [a] short span through different means can be really impactful.”

The token sale will capitalize initially on its UST Forex Reserve, with investor purchases locked up over a four-year vesting period.

Additional details on the reserve’s function will be released in coming weeks, the foundation said. LFG was not available for additional comment.

---

Get the news in your inbox. Explore Blockworks newsletters:

• The Breakdown: Decoding crypto and the markets. Daily.
• 0xResearch: Alpha in your inbox. Think like an analyst.