Terra tokenomics lead to market climbing, Bitcoin reserve indicated-altcoins

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Terra

The recent movements in the Finance Ministry of Terra, a decentralized financial payment network that now burns Luna worth more than $ 4 billion due to a governance proposal, apparently increased the price of the asset value at an all-time high (ATH). This increase was also accompanied by new proposals to further consolidate the stability of his stable coin VAT. Do Kwon, Head of Terraform Labs, indicated that a Bitcoin reserve was taken up to protect the dollar bond of the VAT.

luna boomt

The recent changes in the emission model of Terra Target = "_ blank" href = "https://news.bitcoin.com/terra-to-aply-columbus-5-mainnet-migration/" Rel = "Noopener"> Columbus 5 Update, the growth of the Luna network seems to be promoted successfully. The Price of his native wealth value Luna grew and yesterday reached the ATH level at $ 69.59 and recorded a price increase of more than 50%last week. One of the most interesting decisions of the cryptocurrency project was the burning of Luna worth more than $ 4 billion that were held in the project's community pool.

These luna tokens were constantly exchanged for VAT, the project's sibling tabe and are now waiting to be used for other purposes. This was part of a change in the emission model of VAT.

New hybrid model indicated

So far there are no other tokens that are used as collateral to cover the value of the VAT stable. This can sometimes lead to the connection with the underlying currency (the US dollar) lost for various reasons. Due to the restrictions of the model and the incentives to maintain the token connection in some situations, the CEO of Terraform Labs, do Kwon, pointed out the introduction of other solutions to address this problem.

MACH KWON specified in a current Twitter-Thread:

I fed up to argue with idiots on Twitter about whether VAT can remain stable in the bear. So soon I will suggest to create reserves of several billion dollars in decentralized assets ( btc ) save.

If this really happens, Terra would become a hybrid project with a reserve that would cover the value of the VAT stable coin in bear markets. In addition, Kwon indicated that it was used in the community pool as insurance for the currency and also serve as a backing to protect the VAT from a possible DE-PEG.

Note from the publisher: Since the editorial deadline, the markets have experienced a significant downturn on December 4, with Terra (Luna) falling by more than 17% in the last 24 hours.

What do you think about Terra's recent rise on the market? Tell us in the comment area below.

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