Do Kwon, the founder of Terra and Terra Labs, says the company’s plan to accumulate $10 billion worth of Bitcoin for its reserves is almost a third of the way there, thanks to fundraising efforts by the Luna Foundation Guard (LFG).

What happened: Terra, the public blockchain protocol, is building up a reserve of Bitcoin to increase confidence in its TerraUSD (UST) token that has $15 billion in market cap. 

• This month, Kwon tweeted that backing UST with $10 billion in Bitcoin would “open a new monetary era of the Bitcoin standard” and make peer-to-peer spending easier.
• On Tuesday, he replied to a comment under the original tweet, saying $3 billion is “ready to seed this reserve,” but technical issues need to be resolved.

The LFG has raised $2.2 billion so far: $1 billion in an over-the-counter sale of Terra’s native token LUNA for Bitcoin and $1.2 billion by selling UST for tether, leaving the fund $800,000 short of its $3 billion starting point.

Why it matters: The price of UST is tied to LUNA, which has been classified as an “algorithmic stablecoin,” uncollateralized digital assets that some believe are economically fragile. Currently, for every $1 of UST someone seeks, $1 of LUNA has to be burned or removed from circulation, working on a similar principle as a stock buyback. 

Adding a Bitcoin-backstop to UST makes sense for many reasons, primarily its stability.

• “It’s the only asset with a provably calcified and hard code base and much better distributed than all the other digital assets,” Kwon said in an interview with Udi Wertheimer. “So it makes sense to think about using Bitcoin as a hard currency.”