Terraform Labs co-founder Do Kwon admits that the goal for Terra is to ultimately become the largest holder of Bitcoin in the world – after Satoshi.
Terra is in the middle of a grand plan to acquire $10 billion worth of Bitcoin reserves to create a BTC-backed cash system under UST, the ecosystem’s native stablecoin, thus creating a decentralized forex reserve.
“The reason I want to get to $10 billion is that besides Satoshi, we will be the largest single holder of Bitcoin in the world,” Kwon said in an interview.
“In that case, within the crypto industry, the failure of UST is equivalent of crypto itself, because if the largest single wallet sells off all the Bitcoin, then that’s an issue.”
“besides Satoshi, we will be the largest single holder of $BTC in the world”— Legomakers 🌖 (@tlagomi) March 29, 2022
“the failure of $UST is equivalent to the failure of crypto itself”
Currently, Michael Saylor’s MicroStrategy holds the largest Bitcoin treasury, with over $5.8 billion worth of BTC, which would be eclipsed if Terra gets its way.
“So Terra’s goal is to be the largest decentralized money in crypto. Period. Its goal is not to be the largest stablecoin on the Terra blockchain,” Kwon said on a recent episode of the Unchained Podcast.
Kwon says part of the ethos behind building a BTC-backed stablecoin system is to maintain trust in UST across all blockchain ecosystems. While UST may be trusted within the Terra landscape, the CEO says BTC will lend its reputation to win over others on other chains.
“So we’re sort of expanding into, let’s say the Solana ecosystem, Avalanche, Ethereum, Polygon. So we plan to be everywhere where there are developers and users. The thing is, different from growing stablecoin demand in the terra ecosystem itself where trust in UST is extremely high, when we go to and expand into these different ecosystems, then faith in LUNA’s collateral, LUNA’s fitness as collateral is a lot less than what it is in the Terra ecosystem
But if you have Bitcoin as collateral, nobody in crypto really questions it, because it is the apex asset, it has the soundest monetary policy, it has the most Lindy. So it builds valuable bridges to be able to be a more neutral asset as we span across chains.”
Speculation on Terra’s big Bitcoin buys has perhaps been one of the catalysts that has pushed LUNA to all-time highs yet again. At the time of writing, LUNA has gains of 21% on the week, and is only a hair off its all-time high of $110, giving it a year-on-year return of 469%. Analysts have also attributed Bitcoin’s recent price pump to $48,000 to Terra’s aggressive buys, which now stack up to over $1.5 billion.
Proposals for the various architecture of the UST reserve system can be read here.