Does Kwon's Jackpot Play Allies LUNA and BTC Maxis in a Pump Market - The Defiant
Earlier this month, Terra Ecosystem co-founder Do Kwon made a $11M bet that its token, LUNA, would be worth a year over its March 14 price of $88.
According to CoinGecko, with LUNA hitting an all-time high of $109 on March 29, it looks like Kwon is well on its way to winning the bet.
The rise of the token comes at a time when the Terra Ecosystem co-founder has rocked DeFi with his commitment To acquire $10 billion of BTC to serve as the reserve currency for UST, Terra’s flagship stablecoin.
At a high level, users will be able to redeem their UST for an amount roughly equivalent to BTC, although the details of the system are still up in the air – Terra tweeted A proposal by Jump Crypto, dated March 22, outlined how BTC reserves could be used.
biggest names in crypto
The upward price action of LUNA along with the use of BTC to backstop UST announced last month has attracted the attention of some of the biggest names in crypto. “We are starting to reveal some of the earliest and most ambitious ideas in crypto,” tweeted Su Zhu, who co-founded Three Arrows Capital, one of Web3’s foremost investment firms.
“Crosschain decentralized stablecoins fully digitally backed by native assets were the holy grail in 2016,” Zhu tagged both BTC and Luna in his tweet.
Three Arrows Capital, along with Jump Crypto, was one of the investment firms that bought Luna from Guard (LFG), a Singapore-based non-profit focused on supporting the Terra ecosystem.
Daegan Hu slams Terra as ‘Ponzi’ founder bets $1M on LUNA – and he did
The rising reserves of UST created an alliance between the supporters of Luna and BTC. Bitcoin, being one of the largest and oldest digital assets, has a lot of “maxi” supporters who believe that BTC is the only asset worth keeping in the fight for a decentralized financial system.
As Terra buys BTC to support UST, bitcoin is now being used to fuel another asset’s ecosystem, which some bitcoin maximalists may be inclined to dismiss as a valueless distraction. can.
But the buy support for bitcoin is undeniable. Frank Chaparro, news director at digital asset information company The Block tweeted That family offices and crypto hedge funds are buying BTC call options based on the knowledge that spot buying for the digital asset is imminent.
make a mistake
Tapping BTC as a backstop for UST has drawn criticism. On March 28, Eric Wall, chief investment officer at Arcane Assets, criticized the origin of the funds used to build LFG’s bitcoin reserves. Twitter, “The party is not meant to be Popper, but I think Terra is making a mistake for using the Luna funds generated from the ICO,” Wall said.
FubazzlerAs known as the pseudonymous angel investor, the centralized treasury is skeptical of its security, saying that its vulnerability to exploitation makes it a moral hazard.
“If the peg depends on a centrally controlled treasury, and if the owner[s] That treasury becomes a bad actor or becomes compromised, the treasury can go to 0, the peg opens, and then the project dies,” the investor told The Defiant.
to perform better
Most markets appear unconvinced about the move to the Terra ecosystem. With a 27% gain over the past three months, LUNA has outperformed the top ten smart contract platform tokens over that time period.
And it’s not close – at just 6.99%, the NEAR token appreciated second place among those leading smart contract platform tokens.
Of course, there is a long way to go until the LUNA bet is settled by March 14, 2023. For now though, Kwon is smiling. And with BTC up 12% over the past week, you can bet the bitcoin community is too.
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