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Avalanche Acquisition and Breaking Luna News

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Avalanche Acquisition

Maintaining the UST peg seems to be the priority for Do Kwon and it provides a strong insight on where the protocol may end up in the near future. In fact, the work underway on Terra (Luna) Network is safe to say is unprecedented.

As someone who has been around since 2016 I have participated and watched a lot of projects launch and fail with each iteration of innovation trumped by the next one. In my opinion the only other project that comes to mind that Almost made it is Uniswap. IT was front and centre of the emerging Decentralised Exchange (DEX) movement and was what I would term the first attempt at a Cryptoration.

Their expansion and growth was unrivalled and probably the Blockchain sectors first real look at what community ownership and a DAO could achieve. But it landed itself in some hot water when they perceived themselves as political targets and paid lawyers a lot of Uni tokens which ended up being dumped for cash.

To my knowledge the end result was that no SEC action had arisen nor was there any key indicators to suggest that there was and in the end other developers forked their code and new projects were launched.

Uniswap did attempt to expand but their supporter base has never been the same and though the DEX still gets used today, it is no where near the price it once held.

Luna Acquires AVAX

As many are aware by now TerraForm Labs established the Luna Foundation Guard (LFG) for those that don't know the LFG is a key indicator that Terra (Luna) Network will most likely be around for quite some time. It has a number of priorities but the number 1 focus is on maintaining the UST peg through a number of fiscal strategies most notably the recent announcement that LFG is buying Bitcoin to build a UST reserve and help maintain the peg.

LFG's goal is to hold $US10 Billion in Bitcoin reserve to back the UST peg and they have been continuously purchasing Bitcoin growing their position. But they also announced that they would be buying other digital currencies to back the UST peg with a pretty big announcement recently made.

LFG has purchased $US200 Million worth of AVAX tokens through a partnership model. The exchange wasn't undertaken through the selling of UST and purchasing of AVAX it was a straight swap between the two companies. So in that regard AVAX also now holds $US100 Million in UST and $US100 Million in Luna, which it also intends to hold to safeguard their network.

Avalanche and TerraForm Labs collaboration

The trade itself is only worth half the news because in short, it is just a trade between to decentralised protocols and it's impact on regular retail investors is quite non existent although makes for great news.

The bigger part of the story is the fact that TerraForm Labs and Avalanche will be working together on a new gaming subnet although no further news has been released at current we can see that Terra (Luna) Network which has dominated the Decentralised Finance (De-Fi) space is now honing in on the gaming sector and making moves to ensure it's blockchain is capable and fast enough to handled Blockchain gaming.

But Blockchain gaming won't be an easy feat for Terra (Luna) Network as it currently uses Tendermint a cosmos system with a max TPS of 10,000 and with protocols such as Solana and SYScoin around which are peaking at speeds of 50,000 TPS, Terra (Luna) Network is going to have to come up with a way to close ground and fast.

How that will pan out is still yet to be seen as Avalanche itself only has a max TPS of 4,500 and comes with a negative with it's Proof-Of-Stake (PoS) Network not punishing validators that perform badly through slashing where as Terra (Luna) Network does.

How Bitcoin and AVAX will be used to secure the peg

There has been a lot of questions being raised on how LFG assets will be used to maintain the peg as everyone knows you Burn Luna for UST and visa versa to ensure the peg holds. But right here, right now we can tell you the ins and outs of what is actually going to occur and how these reserve pools will be utilised to protect the UST peg. Too be honest, it is quite ingenious and I can totally understand how this will work.

When markets start crashing people either start moving their accrued funds into stable coins to prevent loss of their positions and on Terra (Luna) Network that is pretty much covered as they have UST.

But what happens if people no longer want to remain in Terra (Luna) Network as an occurrence of FUD or even FOMO on another chain has emerged.

That's when the LFG reserves come into play by offering people the opportunity to swap their UST or Luna for a reserve asset at a slightly better marker price and the from here investors can ride those waves or sell for fiat.

Effectively the reserves won't be used to buy back UST and Luna to "pump" the prices but rather offer current holders the opportunity to exit and not "dump" the value of the overall network. This would also likely safeguard against shorting of Luna itself as it creates a strong buffer.

With such a fiscal strategy in place there are a few things that I think will happen in the coming months for Luna and that is that it will become a blue chip investment strategy that will possibly be one of the safest digital assets and stable coins on the market. I don't need to tell you what that means in regards to price.

Luna has its sights on being the Cryptosphere bank

As pointed out in Loop Finance's blog, Luna isn't chasing the "Best Crypto" category it has it's eyes firmly planted on it's goal of being the Cryptosphere's bank. This can be evidenced with the growth of Anchor Protocol and the rapid expansion of UST across the Cosmos and a number of chains.

Which was impressive but what is coming even topples a cross chain token and will leave you impressed. Anchor Protocol itself will be available on Avalanche Network and participants can stake UST on AVAX into the protocol for the impressive 20% APY. But the fun doesn't end there as AVAX HODLrs will be able to provide their tokens as collaterally the same as Anchor on Terra (Luna) Network and borrow against them for UST and stake into Avalanche's version of Anchor.

I have to admit, this is all really impressive.

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CONGRATULATIONS DO KWON AND FAMILY

In other breaking News Do Kwon and his partner have recently given birth to a healthy baby girl named Luna.

Congratulations and may you all live long, happy and healthy lives.

Image Sources provided supplemented by Canva Pro Subscription. This is not Financial Advice and readers are advised to undertake their own research or seek professional financial services

Posted Using LeoFinance Beta