Singapore-based Luna Foundation Guard continues to pursue its mandate to aid in growing the Terra blockchain ecosystem. The non-profit organization has now voted in favor of another massive LUNA token burn from its treasury.
The Luna Foundation Guard (LFG) announced on Tuesday that the organization’s council has voted to burn an additional 4 million of Terra’s native token LUNA.
According to the announcement, the burn will allow the LFG mint around 372 million in UST. The so-called UST functions as an algorithmic stablecoin pegged to the price of the US dollar.
Proceeds from the burn are reportedly earmarked to secure external collateral meant to safeguard UST reserves and ensure increased circulating supply in the DeFi space.
Earlier in February 2022, the LFG raised $1 billion to launch a bitcoin-backed reserve to help hedge UST against drastic crypto market selloffs.
This push for additional backing for UST reserves comes as investor demand for the stablecoin has increased in recent months. Data from CoinMarketCap shows that UST’s market capitalization skyrocketed since November 2021 and currently sits around $14 billion as of the time of writing this report.
The LFG Council’s vote comes shortly after Terraform Labs CEO Do Kwon accepted multiple bets on the price of LUNA while also stating that UST will not de-peg.