• This is one of the largest capital raises to date in the crypto industry, next to NYDIG’s $1 billion funding round in December 2021
  • “[It’s] $1B to absorb liquidity crunches,” Kanav Kariya, president of Jump Crypto, tweeted

A nonprofit working to scale the ecosystem of the Terra blockchain has raised $1 billion in a private token sale.

With the funding, the Luna Foundation Guard (LFG) plans to establish a bitcoin reserve for Terra’s UST stablecoin.

“The UST Forex Reserve is an initiative to provide a further layer of support using assets that are considered less correlated to the Terra ecosystem, initially with Bitcoin but with plans to expand to other major non-correlated assets within the market moving forward,” the foundation said in a statement.

Jump Crypto and Three Arrows Capital led the token sale, with participation from DeFiance Capital, GSR, Republic Capital, Tribe Capital and others.

The raise is one of the largest to date in crypto, next to NYDIG’s $1 billion funding round, which raised its valuation above $7 billion in December.

Terra, a fast-growing blockchain, now supports more than 70 projects.

As an algorithmic stablecoin, UST is pegged to a series of financial aspects within the Terra protocol, which leads to moves above or below $1. LUNA — Terra’s reserve, staking and governance asset — retains an elastic supply to help neutralize market pressures.

“[It’s] $1B to absorb liquidity crunches,” Kanav Kariya, president of Jump Crypto, tweeted. “All contractions in the economy have caused reflexive movement (by design). Allowing for a big chunk of withdrawals in [a] short span through different means can be really impactful.”

The token sale will capitalize initially on its UST Forex Reserve, with investor purchases locked up over a four-year vesting period.

Additional details on the reserve’s function will be released in coming weeks, the foundation said. LFG was not available for additional comment.

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  • Jacquelyn Melinek is a New York-based reporter covering funding, decentralized finance (DeFi) and decentralized autonomous organizations (DAOs). She previously reported on energy markets for S&P Global Platts and Bloomberg News and is published in over 65 news outlets. She graduated from the University of North Carolina at Chapel Hill with a degree in Media and Journalism. Contact Jacquelyn via email at [email protected]