The Luna Foundation Guard (LFG) has founded a Bitcoin (BTC) denominated forex reserve in a $1 billion private token deal for Terra’s largest stablecoin.

LFG is a non-profit organization that helps to maintain the decentralized Terra ecosystem. The organization was formed last month in Singapore with the aim to sustain the scalability of the TerraUSD coin (UST). An algorithmic decentralized digital currency.

On Feb 22, Terra announced in a tweet that it had raised $1 billion in private sales which is one of the largest token sales ever to be recorded in the crypto world. “The sale was led by Jump Crypto & Three Arrows Capital, with participation from DeFiance Capital, Republic Capital, GSR, Tribe Capital, & many others,” the company wrote.

How does UST operate?

Unlike other centralized stablecoins like Tether (USDT) or USDCoin (USDC), TerraUSD is not controlled and reserved by a central entity. Meaning, UST stabilizes its U.S. dollar-pegged price using algorithms based on arbitrage.

“A decentralized economy needs decentralized money,” said Do Kwon, founder and CEO of Terra Labs, the company behind Luna and UST. Adding that, “decentralized money needs decentralized reserves.”

Furthermore, the price of UST keeps its peg by using a not-too-complicated economic supply and demand algorithm. According to Terra’s website, “When the demand for Terra is high and the supply is limited, the price of Terra increases. When the demand for Terra is low and the supply is too large, the price of Terra decreases. The protocol ensures the supply and demand of Terra is always balanced, leading to a stable price.”

Terra’s winner coins

Terra (LUNA) and TerraUSD are the two top coins of the Terra decentralized blockchain protocol. With a total market cap of $21.732 billion, LUNA is the ninth-largest digital currency. Moreover, UST is the fourth-largest stablecoin with a market cap of $12.2 billion.

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