The Luna Foundation guard diversifies its stablecoin reserve by purchasing $100M AVAX tokens

The Foundation tasked with growing the UST reserve to make sure the algorithmic coin can maintain its peg with the US dollar, without having any FIAT money collateral, had originally announced plans to acquire $10 billion in Bitcoin, but has now decided to diversify its reserves by buying AVAX tokens worth $100 million.

Since the end of January, the Foundation has added more than $1 billion in BTC to the UST stablecoin reserve. According to an interview given by Terraform Labs’ founder Do Kwon for Bloomberg, the company chose Avalanche due to the rapid growth of the network and its large fan base.

The collaboration between Avalanche and Terra is said to allow Avalanche users to trade UST for AVAX directly on the Avalanche blockchain, where the Terra reserve funds in AVAX will remain, unlike BTC which the Foundation keeps on the Terra network.

The investment happens just one month after Avalanche launched a $290 million fund to attract new projects to its ecosystem, with the help of major investment firms like Golden Tree Asset Management, Jump Crypto, and Valkyrie. At the same time, the USDC stablecoin on the Avalanche blockchain surpassed 1 billion tokens in circulation according to data from Snowtrace.