Luna Foundation Invests $450 Million in DeFi Protocol

Terra

on February 10 Luna Foundation Guard (LFG) Announced plans to add $450 million to the Anchor Protocol revenue reserves of the Terra DeFi Protocol.

The foundation of Terra maker Doo Kwon is helping the DeFi loan agreement maintain a comparatively high 20% yield on stablecoin UST for the rest of 2022 – but why is it doing so?

The anchor is at the heart of the protocol Terra DeFi Ecosystem, as it promises investors a comparatively safe return on their US dollar. In Ave, for example, investors get only 5-10% on deposited stablecoins, whereas in Anchor Protocol they are getting 20% ​​returns consistently for over a year. As a result, the Anchor Protocol has become by far the most important DeFi protocol in the Terra ecosystem and now manages almost $10 billion, But UST’s 20 percent annual return has declined by more than 80 percent in recent months due to a lack of borrowing revenue reserves needed to ensure it. The return of 20 per cent could not be guaranteed for long and will increase down 13-15 percent,

Which is why the Luna Foundation Guard has now intervened.

The $450 million temporary cash injection is intended to give Anchor Protocol more time to develop a sustainable economic model. At the current pace of development, the cash injection will help the protocol take about nine months to complete.

DeFi Protocol is now planning to expand its service to other blockchains including Avalanche, Solana and Atom to increase its revenue.

In governance discussion An employee of Terra-affiliated venture capital fund Hashed commented:

We believe that adequate revenue reserves ensure the growth of UST and benefit all stakeholders. The goal is to ensure that Anchor achieves mass adoption while remaining essentially “decentralized and self-sustaining”

Just a few months ago, Crypto.com acquired the naming rights for the Lakers Stadium in LA for marketing purposes have bought, Terra is now following suit and has signed a five-year sponsorship deal with the Washington Nationals baseball team.

The first steps towards this agreement started in January. Do Kwon, co-founder of TerraForm Labs, the company behind the Terra Blockchain, announced at the time that funds would be raised for a partnership with a yet-to-be-named professional sports franchise.

In line with Kwon’s original proposal, a deal with the Washington Nationals would entail an investment of approximately $40 million.

In addition, the adoption of DeFi on Terra is to be promoted as part of the agreement with various strategies. For example, two partners plan to make this possible at a baseball team’s specific National Park club. to pay with VAT,

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