Singapore-based Luna Foundation Guard, a non-profit building reserves for the Terra (UST) stablecoin, plans to buy $100M worth of Avalanche tokens
MK Manoylov / The Block :
Context & Ripple Effects
Luna Foundation Guard had already raised $1 billion through a LUNA sale to establish a BTC-denominated reserve for UST. The planned Avalanche allocation broadens that reserve-building effort beyond the asset mix initially described.
The reserve program continued to receive support from Terraform Labs, including a later 10 million-LUNA contribution, while subsequent coverage recorded major bitcoin purchases. Together, the coverage frames LFG as UST's dedicated reserve manager rather than a one-time buyer of crypto assets.
First-order effects
- Luna Foundation Guard plans to add $100 million of Avalanche tokens to the assets intended to support UST, making Avalanche a direct part of its reserve strategy.
Second-order effects
- UST's support architecture becomes more dependent on managing liquidity and market exposure across multiple crypto assets, rather than only on LUNA-funded and bitcoin-denominated reserves.
Third-order effects
- If LFG's multi-asset approach becomes the operating model, stablecoin reserve management shifts toward active portfolio construction, tying UST's support mechanism more closely to the tradability of external tokens such as Avalanche and bitcoin.
The trend: Terra's reserve strategy is moving from native-token funding toward a diversified portfolio of external crypto assets for stablecoin support.