Terraform Labs, the South Korean firm behind the Terra public blockchain, has secured $150 million in funding from a group of notable crypto investors, comprising Arrington XRP Capital, Pantera Capital, Galaxy Digital, and BlockTower Capital.
Terra, a Tendermint-based blockchain, has a stablecoin suite based on its dollar-pegged TerraUSD token (UST). Terra utilises an algorithm to keep the price of UST and its derivatives stable, motivating traders to buy surplus UST if the price drops in return for Terra’s native governance token, LUNA.
Terraform Labs will utilise the $150 million to support initiatives created on the Terra blockchain through the Terra Ecosystem Fund. TerraUSD, which has a market worth of $2 billion is now the fifth-largest stablecoin.
According to Terra’s founder and CEO, Do Kwon, other decentralized stablecoins like MakerDAO’s DAI are capital intensive and have thus struggled with scalability. Back in January, when Galaxy co-led a $25 million round in Terraform, Novogratz talked with Bloomberg about the investment. Among other praise heaped on the company, he said that:
What’s great about Terra is they are one of the first sandbox experiments that’s getting outside the sandbox. We are always looking at those projects because they are the canaries in the coal mines of what else is going to happen
Related: 20% tax on Cryptocurrency in South Korea to reduce illegal projects
The stability of UST has sparked the Terra boom, and investors are taking notice of the stablecoin. Pantera Capital and Coinbase Ventures participated in a $25 million investment round earlier this year to assist Terraform Labs create new UST-backed apps.
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