Overview of Redacted News
written by @speicherx
LUNA has recently showed massive strength after it’s ~60% drawdown from ATH in Q1. Irrespective of market conditions, the 24h trading volume as of today is at 5 billion — of which has surpassed both ADA and SOL just in terms of marketcap to claim the #7 spot. The Terra stablecoin (UST) also hit yet another milestone: 13 billion marketcap.
So what may have caused this recovery?
Back in January, Terraform Labs first released the hints that there will 3 upcoming alpha points for Terra’s Development. All of them have been revealed thus far as of 23/02/2022. As such, this article will provide an overview of the news in chronological order and potentially why the market has reacted so positively towards LUNA alongside current ecosystem movements.
1) Luna Foundation Guard (LFG)
20th of January, 2022
Do Kwon and Terraform Labs announced the formation of the non-profit organization called ‘Luna Foundation Guard’. This NGO was established in Singapore with aims mainly to propel growth and development towards:
- Paving the way for greater economic sovereignty, security, and sustainability of open-source software to foster a decentralized economy
- Targeting stewardship and innovation through supporting the research by providing both financial and technical aid
- Expanding community growth across the world and increasing educational resources for greater outreach
The establishment was initially funded with a 50 million LUNA gift from Terraform Labs, in order to bootstrap it’s stabilizing reserves and grants framework. On the website, it is stated that the application for grants is ‘coming soon’. Founders who are enthusiastic in building their ideas and turn them into reality, but need a great backing — will soon be able to apply through the website.
Unsurprisingly so, the main team structure behind LFG is none other than the respectable figures who have not only shown strong solidarity and support towards Terra from the early days, but they themselves have also contributed to the development of the ecosystem.
- Do Kwon (Co-Founder and CEO of Terraform Labs)
- Nicholas Platias (Founding member and Head of Research at Terraform Labs)
- Kanav Kariya (President of Jump Crypto — He worked his way up from being an intern!)
- Remi Tetot (Co-Founder and Head of Research at Real Vision Group)
- Jonathan Caras (Project Lead at Levana Protocol, Former Starkware)
- Jose Maria Macedo (Co-Founder and Analyst at Delphi Digital)
They will be contributing towards advisory for junior project developments, stemming from their own honed experiences in the field and help to spur the growth of the Terra ecosystem. They will ensure the transparency of decisions made, and lead the research and development through funding and grants — in open and decentralized networks.
Founding members and council members act in their personal capacities and not on behalf of their respective organizations.
2) MLB Nationals Sponsorship
9th of February, 2022
This is amazing news because it signals a huge move forward for innovation in this space: a first-of-its-kind partnership between a DAO and a Sports franchise. Aside from impressive tackling of the regulatory and legal boundaries which were successfully passed, this essentially opens up a new world of opportunities for bringing crypto and decentralized finance to the users.
The initial proposal #186 to promote a 5-year American Professional Sports League passed with a green light. It was shortly announced that it was none other than the Nationals — a sponsorship deal of $40 million for 5 years. The deal entailed a Terra x MLB Sponsorship on none other than the U.S. Securities and Exchange Commission’s home ground.
As per their press release, these are the following details shown below.
The sponsorship will include the general basic terms such as:
• Branding & Naming rights to the premium club and lounge
• Branding inclusion on tickets, club references & products
• Permanent audience-facing signage
• Permanent branding on club seat-backs
This will also extend to further marketing in areas that touches on the franchise’s internal television network and other educational elements such as a five-part digital series that airs on Nationals’ social platforms!
As part of the agreement, UST could be accepted as a payment method at Nationals Park as early as next season.
Another really important factor is also UST adoption. In terms of selling merchandise, supposing commercially reasonable basis: we may start to see UST being an accepted currency when executing venue transactions.
3) 1 Billion BTC Reserves
23rd of February, 2022
This was the one of largest capital raises ever in the entire crypto hemisphere!
The Luna Foundation Guard raised an over-the-counter (OTC) sale of the LUNA token, amounting to 1 billion dollars. The purchase was made by notable organizations such as Jump Crypto, Three Arrows Capital, Republic Capital, GSR, Tribe Capital, DeFiance Capital and other unnamed investors.
These tokens will be locked up over a 4-year vesting period.
Why is this so BULLISH?
First, let’s understand the mint/burn mechanism:
UST is not backed by real-life collateral/fiat, but by the native token LUNA. The algo-stable maintains it’s peg by supply and demand. Network participants are incentivized to arbitrage LUNA to mint UST when UST >$1, vice versa if UST <$1.
Initially, Terra started with 2 protocols: Mirror and Anchor. Today, the TerraUSD (UST) peg has only grown more resilient with ecosystem growth. There are now many ideas formulating on the platform, be it AMMs/DEXs/NFTs or P2E alongside decentralized banking. UST has also spread out across to other chains like Solana, Ethereum and particularly — Avalanche.
However, as an algo-stable, the risks of a death spiral are always inherent. Using the king decentralized asset Bitcoin for reserves as an alternative to back blow-offs seems the most logical: this will help to ensure Terra’s arbitrage incentives remain intact, even if demand for UST faces a drastic fall.
This partially collaterized model acts as a wall of protection, similar to how many central banks hold reserves of foreign currencies to back liabilities against dynamic market conditions.
Of course — ultimately, onus lies on the growth of the ecosystem to bootstrap demand to become the reliable choice for decentralized currencies.
I decided to add this in, because I found this in my drafts.
Did you manage to get on the first ever community AMA with Do Kwon?
We came a long way from then.
That’s all for this week — this digest was supported by Galactic Punks DAO!
Feel free to add the TeFi calendar into your Google Calendar here: https://www.speicherx.com/tefi-calendar
I’m still tracking Terra NFTs daily, so minting dates are also added.
Feel free to join any of the Terra community groups I have created:
Singaporeans: https://t.me/sglunatics
Australians: https://t.me/australianlunatics
International (Chinese): https://t.me/terrachinesegroup
NFT: https://t.me/nftsinterra
