Do Kwon has been one of the most influential figures in the crypto space this year, with his earth project cementing its position in the top ten. However, lately, it is his involvement with Bitcoin which makes tongues wag, and in a recent podcast, he made his goal known: he wants to become the second largest owner of Bitcoin after Satoshi Nakamoto. Kwon was on the popular Unchained podcast, hosted by Laura Shin, where he talked about Terra and how LUNA and UST work, why he decided to adopt the Bitcoin standard for UST, and what would happen to UST if the price of Bitcoin falls. As he has become famous, he made some controversial statements in the hour-long podcast, even saying that Terra has become a Layer 2 solution for Bitcoin.
Do we classify a centralized party holding BTC to backstop a wonky algorithmic stablecoin an L2 these days? Even I don’t believe that Bitcoin’s standards have plummeted to such an extent.— antiprosynthesis.eth ⟠ (@antiprosynth) March 31, 2022
According to Kwon, if Bitcoin crashes in the near future, the effect would be ‘negative’ for UST.
The worst case scenario would be if we were buying Bitcoin and a drop occurred six months later, and correlated with a massive drop in demand for UST. […] I bet the long-term scenario of Bitcoin going up, and reserves being strong enough to withstand UST demand dips is the most likely scenario.
As CNF reported, Terra, through its treasury, which is known as the Luna Foundation Guard, has been accumulating Bitcoin to back its UST stablecoin. Unlike Tether, USD Coin, and other major stablecoins, UST is not backed by dollars in reserve. Rather, it is backed by an algorithmic burning of MOON tokens, with each UST linked to LUNA worth $1. Do Kwon’s goal is to become the second largest BTC holder after Satoshi.
I think if we go up to 10 billion US dollars, the reason why I want to get 10 billion US dollars is that besides Satoshi, we will be the largest single holder of Bitcoin in the world.
At press time, UST’s market cap is $16.5 billion, making it the 14th largest cryptocurrency and the 4th largest stablecoin after Tether, USDC, and Binance USD. Kwon has an ambitious goal of making UST the largest stablecoin in the world. To do this, Terra would have to print around four times as many UST tokens as it does now, with a Tether market cap of $82.1 billion. Kwon stated:
Terra’s goal is to become the largest decentralized currency in crypto, period. The goal is not to become the largest stablecoin on the Terra blockchain, so we expanded to say the Solana, Avalanche, Ethereum, and Polygon ecosystems. We plan to be everywhere there are developers and users.